United States Secretary of State Hillary Clinton says her country will ease its import ban on goods from Myanmar.
Mrs Clinton announced the move - a key remaining plank of the US embargo - during a meeting with Myanmar President Thein Sein at the United Nations General Assembly in New York.
AFP reports she told the president the US "is taking the next step in normalising our commercial relationship", to recognise the reforms made as the Southeast Asian nation emerges from decades of army rule.
"We will begin the process of easing restrictions on imports of Burmese goods into the United States," she told Myanmar's leader, a former general who took the helm of a reformist quasi-civilian regime last year.
"We have watched as you and your government have continued the steady process of reform and we have been pleased to respond with specific steps which recognise the government's efforts and encourage further reform."
The move, which will have to be carried out in conjunction with Congress, comes just over a week after Opposition leader Aung San Suu Kyi started an historic visit to the United States by calling for an end to sanctions.
Her National League for Democracy party hailed the announcement as a positive long term step.
The pace of reform, including the government's decision to welcome the Nobel laureate and her party into mainstream politics and the release of hundreds of jailed dissidents, has provoked a rapid thawing in relations with the West.
It has also seen the removal of most international sanctions.