President Obama has lifted restrictions on US government funding for groups that provide abortion services or counselling abroad.
The decision, which reverses the policy of his predecessor, George W Bush, is a victory for advocates of abortion rights.
Mr Obama says that for the past eight years the restrictions have undermined efforts to promote safe and effective voluntary family planning in developing countries.
"It is right for us to rescind this policy and restore critical efforts to protect and empower women and promote global economic development," he says.
When the ban was in place, no US government funding for family planning services could be given to clinics or groups that offered abortion services or counselling in other countries. Critics of the ban said that many women in poor countries were thus deprived of contraception and other health services, and turned to risky back-alley abortions instead.
Planned Parenthood, a healthcare provider that advocates abortion rights, has welcomed Mr Obama's move, but the president of the anti-abortion group Americans United for Life, Charmaine Yoest, says it's an "insult to the American people to bail out the abortion industry".
The ban was first enforced by Ronald Reagan when he began his second term as President in 1984. Bill Clinton rescinded it when he became President in 1993 and Mr Bush reinstated it in 2001.
Green light for stem-cell research
President Obama has also indicated he will reverse the Bush administration's ban on federal funding for research into the use of embryonic stem cells.
The move comes as a Californian biotech company, Geron Corp, says it's received official permission to start the world's first clinical trial using embryonic stem cells in humans.
The company's scientists want to inject the cells into a group of patients with spinal injuries to test the safety of the procedure and to see if damaged nerves can receive signals again.
