The changes are slated to take effect 16 January.
Policy tweaks include allowing sharing of user information with “affiliates” in a move that could open the door to targeted advertising.
A social media feud between Twitter and Instagram escalated this month as the popular smartphone photo-sharing service made it impossible for Internet users to view its images in “tweeted” messages.
Instagram, which has about 100 million users, is seeking to route photo viewers to its own website, where it has the potential to make money from ads or other mechanisms, instead of letting Twitter get the benefits.
Previously, Instagram pictures shared in messages tweeted from smartphones could be viewed unaltered on Twitter.
Twitter responded by adding Instagram-style photo sharing features of its own.
Instagram rose to stardom with the help of Twitter, but has distanced itself from the messaging service since Facebook completed its acquisition of the photo sharing service in September.
The original price of the acquisition was pegged at $1 billion but the final value was less because of a decline in the social network’s share price.
Instagram was given a Facebook spin last month with the roll-out of online profiles that let people showcase themselves and photos they have taken with the smartphone application.
People can share their profiles with whomever they wish, as well as “follow” other Instagram users, commenting on or expressing “likes” for pictures.