The United States has announced it will further ease sanctions against Burma. (BBC News)
Secretary of State Hillary Clinton said some travel and financial restrictions would be relaxed, with Burmese leaders allowed to visit the US.European Union leaders had said earlier on Wednesday that they would consider taking similar steps.
The news follows by-elections in Burma on Sunday in which pro-democracy leader Aung San Suu Kyi's party secured a landslide win.
The National League for Democracy (NLD) took 43 out of 45 seats up for grabs in the polls, which were generally deemed to be free and fair.
Mrs Clinton, who paid a visit to Burma last year, praised President Thein Sein's "leadership and courage".
"We fully recognise and embrace the progress that has taken place and we will continue our policy of engagement," she said.
Under the moves, the US will name an ambassador to Burma and establish an office for its Agency for International Development in the country.
The US would also begin "targeted easing" of the ban on US financial services and investment in Burma, she said without giving further details.
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Administration officials said agriculture, tourism, telecommunications and banking would be among the economic sectors to be considered for the relaxation of sanctions.
Mrs Clinton said that sanctions would remain in place "on individuals and institutions that remain on the wrong side of these historic reform efforts". The US eased some sanctions on Burma in February.
The recent by-elections are being hailed as an important step in Burma's transition from decades of authoritarian military rule towards a more open, democratic and representative system. But it is a transition fraught with difficulties.
Aung San Suu Kyi will feel that the risk she took in deciding to participate in the elections has been vindicated by the scale of her party's success.
But the real test will be to see how effective she is able to be as an agent for change within parliament.
