The European Union will suspend most sanctions against Burma while it assess the country’s progress toward democracy, officials say.
EU foreign ministers will announce the decision on Monday, they said.
The sanctions will be suspended for a year, with the possibility of a review in six months. They target more than 800 companies and nearly 500 people.
Burma, long a dictatorship, appears to be undergoing a remarkable transition.
Last year, the junta ceded power to a new government that has embarked on widely praised reforms, including opening a dialogue with opposition leader Aung San Suu Kyi and allowing her to run for – and win – a seat in parliament.
An embargo on arms and equipment that can be used for internal repression will remain in place.
British Prime Minister David Cameron visited Burma earlier this month, becoming the first leader of a major western country to visit the nation since the relaxation of military rule.
EU foreign policy chief Catherine Ashton plans to travel to the country at the end of the month.