President Barack Obama has opened the door to restoring full diplomatic relations with Cuba after 50 years of sanctions and embargo, announcing that the US would seek to open an embassy in the coming months and to relax economic and travel restrictions.
The announcement was made after an exchange of jailed spies was negotiated struck and, separately, an American imprisoned in Cuba named Alan Gross, was released.
Three Cuban agents jailed for espionage against Cuban exile groups in Florida in 1998 were exchanged for an unnamed American agent in Cuba who had passed on information about their network.
Mr Gross, who is 65 and in failing health after a hunger strike, was detained in Cuba in 2009 while setting up internet access as a subcontractor for the US Agency for International Development.
In a speech a the White House the president urged Cubans and Americans to leave by behind the "tyranny of both colonialisation and communism."
He said neither Cubans nor Americans were "well served by a rigid policy that's rooted in events that took place before most of us were born."
Mr Obama said the policy had failed to dislodge the communist party in Cuba, and noted that America had already long resumed relations with both China and Vietnam.
"Though this policy has been rooted in the best of intentions, no other nation joins us in imposing these sanctions, and it has had little effect beyond providing the Cuban government with a rationale for restrictions on its people," he said.
Directly addressing the Cuban people he said, "Today, I'm being honest with you. We can never erase the history between us, but we believe that you should be empowered to live with dignity and self-determination."
The announcement provoked a divided reaction from congress and interest groups, among whom the Cuban relationship remains an incendiary political issue.
Senator Marco Rubio, a Cuban American Republican from Florida thought to be considering a bid for the White House condemned the move.
"I intend to use my role as incoming Chairman of the Senate Foreign Relations Committee's Western Hemisphere subcommittee to make every effort to block this dangerous and desperate attempt by the President to burnish his legacy at the Cuban people's expense," Senator Rubio said in a statement.
"Appeasing the Castro brothers will only cause other tyrants from Caracas to Tehran to Pyongyang to see that they can take advantage of President Obama's naiveté during his final two years in office," he said.
"As a result, America will be less safe as a result of the President's change in policy. When America is unwilling to advocate for individual liberty and freedom of political expression 90 miles (145 kilometres) from our shores, it represents a terrible setback for the hopes of all oppressed people around the globe."
The change was also criticised by the Democratic Senator from New Jersey, Bob Menendez, the outgoing Senate Foreign Relations Committee chair.
"President Obama's actions have vindicated the brutal behavior of the Cuban government," he said in a statement.
Miami-Dade County Commissioner Esteban "Steve" Bovo, a Republican, described President Obama as a sellout.
"Today will be a sad day for all those who have dedicated their lives for a free Cuba. Our President has sold out freedom," Bovo posted to his Twitter account,
But the move was backed by the US Chamber of Commerce, whose president, Tom Donohue said,"The prime beneficiaries from an end to the embargo would be American agricultural exporters. But just about every industry could benefit for the simple reason that there is such pent-up demand. Look at the cars they are running — Jack Kennedy was in office when half of them were sent down there."
Though President Obama had declared his intention to work towards normalising relations with Cuba at the start of his presidency, Mr Gross's imprisonment hampered efforts.
The President is prevented by law from re-establishing full ties or scrapping the embargo without congressional approval. Instead he is using his executive authority to increase the amount of money Cuban Americans may remit to family in Cuba, relax restrictions on commerce and extend the types of travel permitted from the US. Tourism will remain prohibited but travel for reasons including business, cultural exchange and educational exchange, journalism and religion will be further eased.
Last year Mr Obama authorised high level diplomatic talks with Cuba, which were hosted by Canada and in his speech at the White House he thanked both Canada and the Vatican for facilitating talks with Cuba.
President Obama and his Cuban counterpart Raul Castro spoke on the phone for about 45 minutes on Monday, the first presidential level communication between the two nations since the Cuban revolution in 1959.
For years politicians have been wary of re-establishing ties with Cuba for fear of alienating the well-organised overwhelmingly conservative Cuban diaspora centered in Florida. But given the passage of time and the failure of the embargo some analysts believe the political danger has waned. But second generation Cuban Americans are thought to be less supportive of the embargo than their parent's generation, many of whom lost everything when Cuban businesses were nationalized without compensation during the revolution.
"No senior administration official believes the embargo will foster democratic change," Gregory B. Craig, a former White House counsel, said in a recent conference on Cuba at Columbia University, the LA Times reported. "U.S. politicians can support change in Cuba policy without great political risk."
US-Cuba relations: a fiery history
1898 - US declares war on Spain, the colonial power in Cuba. The Spanish are easily defeated and cede Cuba, Puerto Rico and the Philippines to the U.S.
1902 - Cuba becomes independent, but the Platt Amendment allows the U.S. the right to intervene in Cuban affairs.
1906-09 - US occupies Cuba to put down a rebellion against the Cuban government.
1934 - US renounces its right to intervene in Cuban affairs, revises sugar policy to favor the island
1953 - Fidel Castro leads an unsuccessful rebellion against the dictatorship of Fulgencio Batista.
1958 - Disgusted by his poor human rights record, the U.S. withdraws military aid to Batista.
1959 - Fidel Castro takes over Cuba, becomes prime minister and Batista flees the island.
1960 - All US businesses in Cuba are nationalized without compensation, U.S. severs diplomatic relations and imposes a trade embargo in response.
1961 - US supports failed invasion of the island by Cuban exiles at the Bay of Pigs. Castro declares himself a communist and allies with the USSR.
1962 - The USSR deploys nuclear missiles on the island, triggering the Cuban missile crisis which is resolved when the Soviet missiles are withdrawn.
1980 - About 125,000 Cubans, many of them criminals, are allowed to flee the island to Florida in the Mariel Boat Lift.
2001 - US exports food to Cuba for first time in over four decades when Castro pleas for help following devastation from Hurricane Michelle.
2002 - Prisoners in U.S. war on terror are brought to Guantanamo Bay, the U.S. naval base still operational on Cuba.
2008 - Raul Castro takes over as president of Cuba.
2009 - In April, President Obama lifts restrictions on family travel and remittances to Cuba.
2009 - U.S. citizen Alan Gross detained in Cuba in December and accused of spying for the U.S.
2011 - U.S. calls for release of Alan Gross, serving 15 years in prison for taking Internet equipment into Cuba.
2012 - In September, the Cuban government indicates it is willing to negotiate a release of Alan Gross.