Updated at 2:50 p.m. ET
WASHINGTON - Secretary of State Hillary Rodham Clinton said Friday the United States will send an ambassador to Burma, also known as Myanmar, for the first time in two decades now that the long-isolated country has released hundreds of political prisoners and made other reforms.
Clinton's announcement that the two countries will exchange ambassadors came on a day of celebration in the street of Burma after President Thein Sein issued pardons and freed 651 detainees, including some of its most famous political inmates.
President Obama, in a statement, 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 to deepen engagement and encourage more openness there. As it looks to step up U.S. involvement across the Asia-Pacific region, the Obama administration has shifted from Washington's long-standing policy of isolating Burma'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 Burma has been a charge d'affaires rather than an ambassador. 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.
Burma's own diplomatic representation in Washington is also currently a step below the level of ambassador.
But Clinton cautioned that it's a lengthy process any candidate for ambassador requires Senate confirmation and would depend on continued progress toward reform.
Clinton said the U.S. would identify further steps it could take to support reforms but gave no specifics. Among the other recent moves she commended by the government was its reaching a cease-fire with the Karen National Union, a long-running ethnic insurgency.
The U.S. currently maintains tough political and economic sanctions against Burma that heavily restrict trade, investment and foreign aid. Officials have previously said that lifting sanctions would require consolidation of reforms that have already taken place.
During a visit to Asia in November, Mr. Obama commended "flickers of progress" in Burma, 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," Mr. Obama said.
The Burmese government is still dominated by its army, but it has freed Suu Kyi and begun a dialogue with her, and it has eased restrictions on media and trade unions.
Clinton said having an ambassador would help the U.S. to deepen its ties with Burma's people and government and support "the historic and promising steps that are unfolding."
Clinton urged Burma 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 compete in 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 Burma, 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 Burma next week.