We apply Löwdin's canonical orthogonalization method to investigate the linearly dependent problem arising from the variational calculation of atomic systems using Slater‐type orbital configuration‐interaction (STO‐CI) basis functions. With a specific arithmetic precision used in numerical computations, the nonorthogonal STO‐CI basis is easily linearly dependent when the number of basis functions is sufficiently large. We show that Löwdin's canonical orthogonalization method can successfully overcome such problem and simultaneously reduce the dimension of basis set. This is illustrated first through an S‐wave model He atom, and then the real two‐electron atoms in both the ground and excited states. In all of these calculations, the variational bound state energies of the two‐electron systems are obtained in reasonably high accuracy using over‐redundant STO‐CI bases, however, without using extended high‐precision technique. © 2015 Wiley Periodicals, Inc.