A referendum on Chuuk's independence from the Federated States of Micronesia, or FSM has reportedly been postponed until 2022.
It is the third time the vote has been postponed.
Chuuk is the most populace state of four which make up the FSM, a country with a Compact of Free Association with the United States.
Reuters reports Chuuk's independence aspirations stem from discontent over how funding from the US has been shared.
Chuuk's Attorney General, Sabino Asor, who is leading the pro-independence campaign says delaying the vote will give the FSM time to "correct some of the funding deficiencies".
Chuuk's proximity to American military assets on Guam has raised the profile of the vote.
Parts of the compact expire in 2023, raising the prospect that Chuk or the FSM could shift its relationship towards China.
After a state visit to Beijing by FSM President David Panuelo in December, China pledged at least $US72 million in funding for FSM infrastructure projects.
Though tiny in land mass, Pacific nations including the FSM control vast swaths of ocean, forming a boundary between the Americas and Asia.
Jian Zhang, associate professor at UNSW Canberra at the Australian Defence Force Academy, said Micronesian states were ideally located.
"It is in quite a strategic area, both close to U.S. bases, which could provide China an ability to monitor and deter military activity," Zhang told Reuters.
In August 2019, Mike Pompeo became the first U.S. Secretary of State to visit the FSM.
"I'm pleased to announce the United States has begun negotiations on extending our compacts.... they sustain democracy in the face of Chinese efforts to redraw the Pacific," Pompeo told reporters at the time.
Originally planned to coincide with the 2015 federal elections, the vote on the independence was pushed back to the 2019 federal elections, then further postponed to March 2020.
Chuuk has 50,000 inhabitants - almost half of the FSM's total population. A vote for Chuuk independence would be decisive, as the 45,000 eligible voters are arguably split on the issue. Voter education and awareness were cited as reasons for earlier postponements.