The action formalizes the shift toward normalization that the president unveiled almost two years ago with the announcement that he and President Raúl Castro of Cuba had secretly agreed to fix their countries' relationship.
In a statement, U.S. Secretary of Commerce Penny Pritzker said, "These amendments will create more opportunities for Cuban citizens to access American goods and services, further strengthening the ties between our two countries".
The new regulations that were issued by the U.S. Treasury Department also make it easier for US Companies to import Cuban made pharmaceuticals and allows U.S. agricultural companies to sell their products to the island nation, and allows Cubans to buy U.S. made goods.
For travelers, the most noticeable change will be the removal of the $100 limit on what they are allowed to bring back in terms of Cuban tobacco and alcohol as long as they are for personal use and pay the normal duties that would apply.
"This new directive consolidates and builds upon the changes we've already made", Obama said.
In the directive, President Obama called on lawmakers to officially end the embargo with Cuba, calling it "outdated".
Now, working at a Cigar shop in Ybor City, he says President Barack Obama's decision to lift restrictions on Cuban rum and cigars is what the communist island needs. Importing Cuban cigars and rum for commercial purposes remains illegal.
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More historic changes are coming to U.S./Cuba relations.
Susan Rice, the president's national security adviser, noted Friday that the president's directive came on the anniversary of the day in 1962 when an American U-2 plane flying over Cuba photographed nuclear missile sites, setting off the Cuban Missile Crisis.
The changes will take effect on October 17, 2016, when the regulations are published in the Federal Register.
Windsor cigar sellers are unsure whether U.S easing restrictions on Americans bringing in Cuban cigars will affect their business.
In addition to lifting restrictions on booze and tobacco, the White House also announced it will now allow exports to Cuba of some US consumer goods sold on the Internet, and let USA firms improve Cuban infrastructure for humanitarian purposes.
He added, however, that "challenges remain - and very real differences between our governments persist on issues of democracy and human rights".