MEXICO CITY — The White House announced on Tuesday that President Obama intends to remove Cuba from the American government’s list of nations that sponsor terrorism, eliminating a major obstacle to the restoration of diplomatic relations after decades of hostilities.
The decision to remove Cuba from the list represents a crucial step in Mr. Obama’s effort to turn the page on a Cold War-era dispute.
It came after a much-anticipated meeting between Mr. Obama and President Raúl Castro of Cuba on the sidelines of the Summit of the Americas meeting in Panama over the weekend, the first such formal session between the leaders of the two countries in more than a half-century.
For more than 30 years, Cuba has been on the State Department’s list of state sponsors of terrorism, a designation shared only by Iran, Sudan and Syria.
Cuba’s place on the list has long snarled its access to financial markets and, more recently, emerged as a sticking point in negotiations to reopen embassies that have officially been closed for five decades.
Mr. Obama ordered a review of Cuba’s status in December, as he and Mr. Castro agreed to move toward normal relations.
White House officials said that Mr. Obama approved a recommendation by Secretary of State John Kerry to take Cuba off the terrorism list after the review of Cuba’s record and assurances from the country’s government that it would not support terrorism in the future.
“We will continue to have differences with the Cuban government, but 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,” Josh Earnest, the White House press secretary, said in a statement.
Mr. Earnest said the president would continue to “support our interests and values through engagement with the Cuban government and people.”
The State Department determined that Cuba had not engaged in terrorist activity in the past six months — a criterion for designating a country as a state sponsor of terrorism — and therefore no longer belonged on the list.
Washington’s isolation of Cuba, particularly its embargo of the island, has been a perennial source of hostility in Latin America, uniting governments across the region regardless of their ideologies.
Even some of Washington’s close allies in the Americas have rallied to Cuba’s side, sometimes making it hard to gain traction on other, unrelated issues, administration officials have said.
Cuba was attending the summit meeting for the first time since the gathering’s inception in 1994.
The meeting created the first publicly planned encounter of the American and Cuban presidents since 1958, though Mr. Obama and Mr. Castro shook hands in greeting at Nelson Mandela’s funeral in South Africa in December 2013 and President Bill Clinton and Fidel Castro shook hands and chatted briefly at a United Nations meeting in 2000.
To many, the decision to remove Cuba from the list affirmed the obvious. When Mr. Obama announced that he would seek normal ties with Cuba, he expressed doubt that the nation belonged on the list.
Last week, Mr. Obama appeared to be sharpening his defense of removing Cuba’s terrorism designation, telling NPR that the criterion for doing so is a “straightforward” evaluation of whether a country is a state sponsor of terrorism, “not do we agree with them on everything, not whether they engage in repressive or authoritarian activities in their own country.”
Analysts said Cuba’s designation had more to do with politics than any terrorist activity, and even before the decision was announced, critics attacked the move.
The terrorism designation “is a hot potato that is literally too hot for the banks involved to do the business,” said Antonio C. Martinez II, a New York lawyer whose practice includes the regulations surrounding Cuban assets.
“The banks involved in or contemplating doing business with Cuba have an enormous compliance burden that does not justify the costs,” he added. “That is why no bank wanted” to have accounts with Cuban diplomats in the United States, complicating efforts to reopen an embassy.
State Department officials said they had embarked on a thorough review to ensure that their decision could stand up to any questioning in a Republican-controlled Congress where there are fierce objections.
Cuba will not come off the list until after a 45-day review period, during which a joint resolution to block its removal could be considered in the House and Senate. The idea of removing Cuba’s terrorism designation has been met with considerable resistance from Republicans, including many Cuban-American lawmakers.
Even before any announcement had been made, Representative Ileana Ros-Lehtinen, a Florida Republican who has vowed to block any step toward normalizing ties, issued a statement saying that Cuba’s expected removal from the list “would be nothing short of a miscarriage of justice borne out of political motivations not rooted in reality.”
She said that Mr. Obama’s administration was “so desperate to open up an embassy in Havana at any cost that it is willing to concede to Castro’s demand,” adding that the action would “further embolden the regime and undermine U.S. national security.”
The issue of the terrorism list has helped delay the opening of embassies that have been closed since 1961 during the Cold War.
Cuban officials have said they would find it difficult to move forward with diplomatic relations while remaining on the list, which they see as a blemish to their nation’s image and a scarlet letter that has blocked Cuba from doing business with American banks and led some international institutions to shy away from opportunities to work with Cuba.
The United States had sought to keep the terrorism designation question separate from the question of restoring diplomatic relations, focusing its demands on ensuring that diplomats could travel freely in Cuba and that Cubans would not be bothered by the police as they entered the redesignated embassy.
Cuba landed on the list in 1982 for its support of leftist insurgents in Latin America. It has remained on the list since then because, according to a State Department report in 2013, the most recent available, it has provided a “safe haven” for Basque separatists and Colombian rebels.
Senator Robert Menendez, a New Jersey Democrat, last week called the move “another significant misstep in a misguided policy” and cited Ms. Chesimard’s case among his examples of Cuba’s terrorism record.
Still, as the State Department report noted, several of the Basque separatists had been repatriated to Spain, and Cuba has played host to peace talks between the Colombian government and a major rebel group, known by its Spanish acronym FARC.
Fidel Castro in a speech in 1992 said Cuba no longer was supporting insurgents abroad.
“There was no indication that the Cuban government provided weapons or paramilitary training to terrorist groups,” the 2013 report said.
Inclusion on the list has stymied Cuban banking and kept it out of many overseas financial markets. Not even its interests section in Washington, the diplomatic outpost that performs some functions of an embassy, could get a bank account as financial institutions worried about violating sanctions from the Treasury Department over doing business with a state on the terrorism list and running afoul of the trade embargo.
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