The US has decided to remove Libya from its list of state sponsors of terrorism and to renew normal diplomatic ties, a State Department official said yesterday.
A formal announcement was expected later.
In addition to the opening of an embassy in Tripoli, an official said, the US would remove Libya from its list of terrorist states in 45 days.
The move is a culmination of a process that began three years ago when Libya surprised the world by agreeing to dismantle its nuclear weapons program.
Washington has not had normal relations with Libya since 1980. The State Department for years said that Libya was a major sponsor of international terrorism.
Libya was held responsible for the bombing of Pan Am Flight 103 in 1988, which claimed 270 lives, most of them American.
But Libya has made a decisive move away from terrorism in recent years, officials said.