Pope Francis has congratulated the United States and Cuba on their decision to establish diplomatic relations, and the Vatican said it was ready to support the strengthening of bilateral relations.
In a statement, the Vatican also confirmed that its diplomats facilitated talks between the two countries, "resulting in solutions acceptable to both parties."
Three Cuban intelligence agents who had served 16 years in U.S. jails have returned to Cuba.
They were released as part of a prisoner exchange in which Cuba freed an American foreign aid worker who had served five years in a Cuban prison, President Raul Castro said.
Castro said he spoke with U.S. President Barack Obama by telephone on Tuesday ahead of the announcement that the United States would be moving to normalise relations between the two countries.
Cuban president Raul Castro has confirmed that his government will release a man of Cuban origin who had spied for the United States.
President Obama says today's announcement of moves to normalise US relations with Cuba is "the most significant change" in policy in over 50 years.
He said the "outdated" approach of cutting Cuba off from the US had not delivered for either country.
Among the moves will be the re-establishment of a US embassy in the Cuban capital, Havana.
The Vatican had a significant role in negotiations to release US prisoner Alan Gross from Cuba, according to a US Senator.
Dick Durbin, who represents the state of Illinois, has campaigned for Mr Gross' release and said he was "overjoyed" by the news.
But there were already quick objections to the news from some U.S. lawmakers.
Robert Menendez, the current head of Senate Foreign Relations Committee, denounced President Barack Obama's actions on Cuba, saying they "vindicated the brutal behavior of the Cuban government."
U.S. Senator Marco Rubio said on Wednesday he would "make every effort" to block moves by President Barack Obama toward normalising relations with the Cuban government.
"The president's decision to reward the Castro regime and begin the path toward the normalization of relations with Cuba is inexplicable," Rubio said in a statement.
The Florida Republican senator, who is Cuban-American, said he would use his role as chairman of the Senate Foreign Relations Committee's Western Hemisphere subcommittee in the new Congress to try to block the plan.
The United States and Cuba are moving to "normalise" diplomatic relations after more than 50 years of separation, President Obama is expected to announce.
Senior U.S officials, previewing Obama's forthcoming announcement, said the United States and Cuba will move to open embassies in each other's capitals, Reuters reports.
President Obama spoke on Tuesday to Cuban President Raul Castro to discuss the changes in a call that lasted nearly an hour.
As part of the relaxation in relations, Secretary of State John Kerry is expected to review Cuba's status as a state sponsor of terrorism.
"These steps will be the most significant changes to our Cuba policy in more than 50 years," a senior administration official told reporters.
"What we are doing is beginning the normalisation of relations between the United States and Cuba."
The lawyer for three Cubans held in the US on spying charges says their release today marks the end of an "arduous experience"., NBC News reports.
Gerardo Hernandez, Antonio Guerrero and Ramon Labanino were three members of a group dubbed the 'Cuban Five'.
They were accused of infiltrating groups of Cuban exiles in Florida who opposed the Castro regime.
"After 16 years of imprisonment, two years of solitary confinement and so much time spent in dangerous prisons, this is not a slap on the wrist," lawyer Richard Klugh said.
The US prisoner who has been released from jail in Cuba after five years only found out he was returning home yesterday, NBC News reports.
Alan Gross was met by his wife Judy in the Cuban capital Havana.
He was also accompanied on the flight home by three members of the US Congress - Senators Patrick Leahy and Jeff Flake and Congressman Chris van Hollen, who serves in Mr Gross' home state of Maryland.
The plane carrying Mr Gross back to America had bowls of popcorn and corned beef sandwiches - both foods he had missed during his incarceration.
Cuba has released American aid worker Alan Gross after five years in prison "on humanitarian grounds" at the request of the US, an official in Washington has said.
CNN reported a prisoner exchange that also included Cuba releasing a US intelligence source and the US releasing three Cuban intelligence agents.
Both President Barack Obama and Cuban President Raul Castro will make a statement at 5pm today on the agreement.
Gross, 65, a US Agency for International Development subcontractor, was arrested in December 2009.
He was later convicted to 15 years in prison for importing banned technology and trying to establish clandestine internet service for Cuban Jews.