The United States and Cuba have agreed to open embassies in their capital cities, a major step in restoring ties after more than 50 years of hostilities.
The Cuban government said Havana and Washington will restore full diplomatic relations and reopen embassies July 20.
The Foreign Ministry in Havana made the announcement Wednesday morning after receiving a letter from President Barack Obama to Cuban President Raul Castro.
Speaking from the White House, Obama called it a "historic step" and said that the reopening of embassies in Havana and Washington is another demonstration that the U.S. doesn't have to be imprisoned by the past.
Obama said Secretary of State John Kerry will travel to Havana over the summer to raise the American flag over the embassy.
He said the reopening of a full embassy in Havana means American diplomats will be able to engage directly with Cuban government officials, civil society leaders and ordinary Cubans. He was referring to the freedom of movement for U.S. diplomats that had been a sticking point in negotiations to reopen the embassies.
Obama also called on Congress to lift the U.S. embargo on Cuba. He said lawmakers should listen to the Cuban people and the American people who oppose maintaining economic sanctions against the island nation.
The onetime Cold War foes have not had full diplomatic ties for more than five decades.
The U.S. and Cuba have been negotiating the re-establishment of embassies following a surprise December announcement that secret talks had led to an agreement to restart diplomatic relations.
For Obama, ending the U.S. freeze with Cuba is central to his foreign policy legacy as he nears the end of his presidency. Obama has long touted the value of direct engagement with global foes and has argued that the U.S. embargo on the communist island just 90 miles south of Florida was ineffective.
Secretary of State John Kerry, who is in Vienna for nuclear negotiations with Iran, is also expected to speak about the embassy openings. Kerry has said previously that he would travel to Cuba for an embassy opening.
The U.S. cut off diplomatic relations with Cuba in 1961 after Fidel Castro's revolution. The U.S. spent decades trying to either actively overthrow the Cuban government or isolate the island, including toughening the economic embargo first imposed by President Dwight D. Eisenhower.
Since the late 1970s, the United States and Cuba have operated diplomatic missions called interests sections in each other's capitals. The missions are technically under the protection of Switzerland, and do not enjoy the same status as embassies.
While the opening of embassies marks a major milestone in the thaw between the U.S. and Cuba, significant issues remain as the countries look to normalize relations. Among them: talks on human rights; demands for compensation for confiscated American properties in Havana and damages to Cuba from the embargo; and possible cooperation on law enforcement, including the touchy topic of U.S. fugitives sheltering in Havana.
Obama also wants Congress to repeal the economic embargo on Cuba, though he faces resistance from Republicans and some Democrats. Those opposed to normalizing relations with Cuba say Obama is prematurely rewarding a regime that engages in serious human rights abuses.
The president also will face strong opposition in Congress to spending any taxpayer dollars on building or refurbishing an embassy in Havana. Congress would have to approve any administration request to spend money on an embassy.
Rep. Ileana Ros-Lehtinen, R-Fla., said in a statement that opening a U.S. embassy in Cuba "will do nothing to help the Cuban people and is just another trivial attempt for President Obama to go legacy shopping."
Sen. Ben Cardin of Maryland, the top Democrat on the Senate Foreign Relations Committee, said the opening of embassies was part of the administration's "common sense approach to Cuba." However, he called for Cuba to recognize that it is out of step with the international community on human rights.
"Arrests and detentions of dissidents must cease and genuine political pluralism is long overdue," Cardin said in a statement.
Obama and Cuban President Raul Castro met in April during a regional summit, marking the first time U.S. and Cuban leaders have met in person since 1958.
For Obama, the embassy announcements come amid what the White House sees as one of the strongest stretches of his second term. He scored major legislative and legal victories last week, with Congress giving him fast-track authority for an Asia-Pacific free trade deal and the Supreme Court upholding a key provision of his health care law.
The court also ruled in favor of gay marriage nationwide, an outcome Obama supported.
This story has been updated.