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President Barack Obama will remove Cuba from the list of state sponsors of terrorism, the White House announced on Tuesday, a key step in his bid to normalize relations between the two countries.

The terror designation has been a stain on Cuba’s pride and a major stumbling block for efforts to mend ties between Washington and Havana.

In a message to Congress, Mr. Obama said the government of Cuba “has not provided any support for international terrorism” over the last six months. He also told lawmakers that Cuba “has provided assurances that it will not support acts of international terrorism in the future.”

Cuba will officially be removed from the terror list 45 days after the president’s message was sent to Congress. Lawmakers could vote to block the move during that window, though Mr. Obama would be all-but-certain to veto such a measure.

Tuesday’s announcement comes days after Mr. Obama and Cuban President Raul Castro met on the sidelines of a regional summit in Panama. The historic talks marked the first formal meeting between the leaders of their countries in a half-century.

The U.S. has long since stopped actively accusing Cuba of supporting terrorism. When Mr. Obama and Mr. Castro announced a thaw in relations in December, the U.S. president expressed his willingness to remove Cuba from that list.

The president’s final decision followed a State Department review of Cuba’s presence on the list.

Removing Cuba from the terror list could pave the way for the opening of a U.S. Embassy in Havana and other steps. Administration officials said they were optimistic about the prospects of opening the embassy, but did not provide any specific updates in timing.

Cuba was designated a state sponsor of terror in 1982 because of what the White House said was its efforts “to promote armed revolution by organizations that used terrorism.”

Those efforts included support for leftist guerrilla groups in Central and South America that carried out attacks on civilians in their efforts to overthrow U.S.-backed governments.

State Department reports on the terror list specifically mention Cuba sheltering members of the Revolutionary Armed Forces of Colombia, or FARC, and the Spanish Basque separatist group ETA.

Cuba renounced its direct support for foreign militants years ago, and is sponsoring peace talks between the FARC and Colombian government.

Cubans say the listing has badly damaged their ability to conduct international financial transactions by frightening banks away from doing business with the communist government. Those who do businesses with state sponsors of terror are vulnerable to lawsuits in U.S. courts.

Cuba’s removal from the terror list will likely make it easier to get credit from non-U.S. banks, transfer funds between countries and conduct a host of other international financial transactions.

White House press secretary Josh Earnest said that taking Cuba off the terror list does not change the fact that the U.S. has differences with the island nation’s government.

“Our concerns over a wide range of Cuba’s policies and actions fall outside the criteria that is relevant to whether to rescind Cuba’s designation as a state sponsor of terrorism,” Mr. Earnest said.

Until Tuesday, the communist island nation remained one of four countries on the U.S. list of nations accused of repeatedly supporting global terrorism. The others are Iran, Sudan and Syria.