Bitcoin currently uses the ECDSA algorithm to generate cryptographic signatures for a given message and secp256k1 keypair. Schnorr is an alternative algorithm with several advantages. One key advantage is that when multiple keys are used to sign the same message with Schnorr, the resulting signatures can be combined into a single signature. This can be used to significantly reduce the size of multisig payments and other multisig related transactions, for example lightning channel transactions.
The main reason that Bitcoin did not originally use Schnorr signatures is that Schnorr was not standardized, and was not available in common crypto libraries.
https://en.bitcoin.it/wiki/Schnorr
