Washington: In what President Barack Obama called "a historic step forward", the US and Cuba have re-established diplomatic relations snapped "at the height of the Cold War" 54 years ago.
"When the United States shuttered our embassy in 1961, I don't think anyone thought it would be more than half a century before it reopened," he said from the White House Rose Garden announcing the historic move.
"This is a historic step forward in our efforts to normalise relations with the Cuban government and people, and begin a new chapter with our neighbours in the Americas," Obama said.
The US and Cuba would reopen their embassies in Havana and Washington, respectively, on July 20.
Earlier on Wednesday in Havana, a US diplomat delivered a note from Obama to Cuban President Raul Castro restoring diplomatic ties snapped during the Dwight Eisenhower administration.
Castro also sent a letter to Obama.
"We want to develop a friendship between our two nations that is based on the equality of rights and the people's free will," Castro said in the letter, read on state-run TV.
He went on to say that Cuba hopes to resolve differences with the US through peaceful means, that each nation must respect the territorial integrity of the other and they should not interfere in each other's political affairs.
Obama has relaxed several of the prohibitions on trade and travel that existed between the two countries, but many remain in place and can only be removed by legislation.
Obama also called on Wednesday for the Congress to lift the embargo that prevents Cubans from travelling or doing business in Cuba.
"Americans and Cubans alike are ready to move forward. I believe it's time for Congress to do the same," he said. "We've already seen members from both parties begin that work."
But the Congress, controlled by Republicans, has shown little sign that it intends to end the embargo.
In his Rose Garden appearance, Obama noted that many Cubans have called for increased US engagement with their country, and said it was time to look toward the future.
Secretary of State John Kerry announced from Vienna on Wednesday that he will travel to Cuba to take part in the formal reopening of the US embassy on July 20. It will be the first visit by a Secretary of State since 1945.