US President Barack Obama announced the reestablishment of diplomatic relations as well as an easing in economic and travel restrictions on Cuba Wednesday, declaring an end to America’s “outdated approach” to the communist island in a historic shift that aims to bring do away with a half-century of Cold War enmity.

“Isolation has not worked,” Obama said in remarks from the White House. “It’s time for a new approach.”

As Obama spoke, Cuban President Raul Castro addressed his own nation from Havana. Obama and Castro spoke by phone for more than 45 minutes Tuesday, the first substantive presidential-level discussion between the US and Cuba since 1961.

Obama’s announcement marked an abrupt use of executive power. However, he cannot unilaterally end the longstanding US economic embargo on Cuba, which was passed by Congress and would require action from lawmakers to overturn.

Wednesday’s announcements followed more than a year of secret talks between the US and Cuba. The re-establishment of diplomatic ties was accompanied by Cuba’s release of American Alan Gross and the swap of a US spy held in Cuba for three Cubans jailed in Florida.

Alan Gross (center right) as he arrives from Cuba on December 17, 2014 at Andrews Air Force Base, Maryland. (AFP/JEFF FLAKE/HANDOUT)

Alan Gross (center right) as he arrives from Cuba on December 17, 2014 at Andrews Air Force Base, Maryland. (AFP/JEFF FLAKE/HANDOUT)

Obama said Gross’ five-year imprisonment had been a “major obstacle” in normalizing relations. Gross arrived at an American military base just outside Washington Wednesday, accompanied by his wife and a handful of US lawmakers. He went immediately into a meeting with Secretary of State John Kerry.

Pope Francis congratulated the historic thaw announced between Washington and the communist-run Caribbean island.

“The Holy Father wishes to express his warm congratulations for the historic decision taken by the governments of the United States of America and Cuba to establish diplomatic relations, with the aim of overcoming, in the interest of the citizens of both countries, the difficulties which have marked their recent history,” the Vatican said in a statement.

It added that the pontiff had sent letters to the US and Cuban leaders in recent months and offered their delegations his offices in October to “facilitate” dialogue.

A local watches Cuban President Raul Castro on TV while he addresses the country, on December 17, 2014 in Havana. (photo credit: AFP/YAMIL LAGE)

A local watches Cuban President Raul Castro on TV while he addresses the country, on December 17, 2014 in Havana. (photo credit: AFP/YAMIL LAGE)

As part of the resumption of diplomatic relations with Cuba, the US will soon reopen an embassy in the capital of Havana and carry out high-level exchanges and visits between the governments. The US is also easing travel bans to Cuba, including for family visits, official US government business and educational activities. Tourist travel remains banned.

Licensed American travelers to Cuba will now be able to return to the US with $400 in Cuban goods, including tobacco and alcohol products worth less than $100 combined. This means the longstanding ban on importing Cuban cigars is over, although there are still limits.

The US is also increasing the amount of money Americans can send to Cubans from $500 to $2,000 every three months. Early in his presidency, Obama allowed unlimited family visits by Cuban-Americans and removed a $1,200 annual cap on remittances. Kerry is also launching a review of Cuba’s designation as a state sponsor of terror.