Washington Secretary of State Hillary Rodham Clinton said Friday the United States will exchange ambassadors with Myanmar in response to its freeing political prisoners and other reforms.
Clinton announced the move after Myanmar President Thein Sein issued a pardon and freed 651 detainees, who included some of its most famous political inmates.
In a statement, President Barack Obama described the pardons as "a substantial step forward for democratic reform."
The U.S. decision follows a landmark visit by Clinton to the repressive country in December as a way of deepening engagement and encouraging more openness there. As the Obama administration looks to step up U.S. involvement across the Asia-Pacific region, it has shifted from Washington's long-standing policy of isolating Myanmar's military government because of its poor human rights record.
"As I said last December, the United States will meet action with action. Based on the steps taken so far, we will now begin," Clinton said at the State Department.
The highest level U.S. diplomat based in Myanmar, also known as Burma, has been a charge d'affaires. Washington downgraded its representation in 1990, when opposition leader Aung San Suu Kyi's party swept elections but was barred from power by the military.
Myanmar's own diplomatic representation in Washington also currently is a step below the level of ambassador.
Clinton said the U.S. would identify further steps it could take to support reforms, but gave no specifics. Among the other recent moves by the government that she commended was its reaching a cease-fire with the Karen National Union, stopping a long-running ethnic insurgency.
The U.S. currently maintains tough political and economic sanctions against Myanmar, that heavily restrict trade, investment and foreign aid. Officials have said previously that lifting sanctions would require consolidation of reforms that already have taken place.
During a visit to Asia in November, Obama commended "flickers of progress" in Myanmar, which staged fresh elections in 2010 and then ended decades of direct military rule.
"Today, that light burns a bit brighter, as prisoners are reunited with their families and people can see a democratic path forward," Obama said.
The Myanmar government still is dominated by the army, but it has freed Suu Kyi and begun a dialogue with her while easing restrictions on media and trade unions.
Clinton said having an ambassador would help the U.S. to deepen its ties with Myanmar's people and government and support "the historic and promising steps that are unfolding."
She cautioned posting the ambassador would be a lengthy process — any candidate requires Senate confirmation — and would depend on continued progress toward reform.
Clinton urged Myanmar to release its remaining political prisoners and make their release unconditional, address concerns of ethnic minority groups and hold free and fair by-elections that Suu Kyi's party will contest April 1.
She said she would call Suu Kyi and Thein Sein this weekend "to underscore our commitment to walk together with them on the path of reform."
Sen. Mitch McConnell, the top Republican in the U.S. Senate, supported Friday's move. He has been a prominent voice in Congress on Myanmar,whose support would be key to any move toward lifted sanctions.
"While the Thein Sein government will need to do more to explain the military relationship with North Korea and hold free and fair elections, it appears entirely appropriate that the United States would consider restoration of more formal diplomatic ties," McConnell said in a statement.
The senator is due to visit Myanmar next week.
Associated Press writer Erica Werner contributed to this report.