The United States and Cuba have agreed to open embassies in their respective capitals. The president described it as a "historic step forward" that must be followed by an end to the decades-old US embargo.
"A year ago it might have seemed impossible that the United States would be once again raising our flag, the stars and stripes, over an embassy in Havana," Obama said in a statement.
Last month, Washington officially dropped Cuba from the list of state sponsors of terrorism.
The United States shut down its embassy in Cuba in 1961, severing diplomatic ties, but has kept an unofficial "interests section" presence in the country.
In December 2014, Obama announced plans to normalize relations between the two countries.
