Cuba and the United States will have embassies in Washington and Havana respectively for the first time in more than five decades.
According to BBC, Cuban President Raul Castro said that it was the start of a long and complex road to normalization.
The US State Department spokesman John Kirby said there were still 'issues that we don't see eye to eye on'.
US Secretary of State John Kerry will hold talks with his Cuban counterpart Bruno Rodriguez in Washington on Monday, another sign of thawing relations between the US and Cuba.
