Obama: US agrees to re-open embassies and restore diplomatic relations with Cuba

Obama: Reestablishing diplomatic relations with Cuba
Obama: Reestablishing diplomatic relations with Cuba   

This is a breaking news story. Please check back for updates.

The United States and Cuba have reached an agreement to re-open embassies and restore formal diplomatic relations after more than 50 years, President Barack Obama said Wednesday.

In a statement, the Cuban government said the countries would re-open embassies in each other's capitals on July 20. A U.S. official told Reuters no date had yet been set for Secretary of State John Kerry to travel to Cuba and open the embassy.

Speaking from the White House on Wednesday, Obama called the move "yet another demonstration that we don't have to be imprisoned by the past."

"Our efforts to isolate Cuba, despite our good intentions, increasingly had the opposite effect," Obama said.

The head of US Interest Section, Jeffrey DeLaurentis (L), talks with Cuban Foreign Vice-Minister Marcelino Medina, after giving him a letter from US President Barack Obama to Cuban President Raul Castro, during a meeting at Foreign Ministry in Havana on July 1, 2015.
Adalberto Roque | AFP | Getty Images
The head of US Interest Section, Jeffrey DeLaurentis (L), talks with Cuban Foreign Vice-Minister Marcelino Medina, after giving him a letter from US President Barack Obama to Cuban President Raul Castro, during a meeting at Foreign Ministry in Havana on July 1, 2015.

Obama and Cuban President Raul Castro struck a deal in December to thaw diplomatic relations severed by the United States in 1961, soon after the island's revolution. Re-opening embassies was considered a key step in the process.

Read MoreNo decision yet on US-Cuba embassies: Diplomat

On Wednesday, Obama urged Congress to scrap a long-standing trade embargo, allowing goods and people to flow more freely between the U.S. and Cuba. The Cuban government in a statement called lifting the blockade "indispensable for the normalization of relations."

The sides held talks late last month, attempting to nail down specifics of normalizing relations. They were the first negotiations since the U.S. removed Cuba for a list of state sponsors of terrorism in April.

Obama noted that "serious differences" linger between the countries on civil liberties and human rights.

"Cuba shall continue to be involved in the process to update its economic and social model in order to build a prosperous and sustainable socialism," the Cuban government said.

The countries hold interest sections in each other's capitals rather than embassies. Currently, U.S. diplomats need permission to leave Havana, while Cuban diplomats cannot travel outside of Washington or New York.

Washington previously stressed that it wanted assurances its diplomats could move more freely around Cuba.

CNBC's Everett Rosenfeld contributed to this report