By Steve Holland
WASHINGTON (Reuters) - The United States and Cuba are moving to normalize diplomatic relations more than 50 years after they were severed in a historic shift in policy, President Barack Obama was set to announce on Wednesday.
Senior U.S officials, previewing Obama's 12 p.m. ET announcement, said the United States and Cuba will move to open embassies in each other's capitals. Obama spoke on Tuesday to Cuban President Raul Castro to discuss the changes in a call that lasted nearly an hour.
The shift will mean a relaxation in the flow of commerce and transportation by the United States to Cuba, the officials said.
As part of a prisoner swap under the new policy, Cuba freed American Alan Gross in exchange for three Cubans held by the United States, the officials said. Cuba is also releasing a U.S. intelligence agent held for nearly 20 years.
U.S. Secretary of State John Kerry will review Cuba's designation 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 normalization of relations between the United States and Cuba."
The official said the United States and Cuba will be intitiating high-level contacts and visits with Cuba.
"We will be immediately initiating discussions with Cuba to reestablish diplomatic relations that have been severed since 1961," the official said.
One official said the policy was being changed because of a belief within the Obama administration that the longstanding U.S. embargo against Cuba was not working.
"If there is any U.S. foreign policy that has passed its expiration date, it is the U.s. Cuba policy," the official said.
(Reporting by Steve Holland and Roberta Rampton)