The European Union suspended a wide range of trade, economic and individual sanctions against Myanmar on Monday, with the exception of an arms embargo, diplomats told AFP.
A diplomat said the deal on suspending the sanctions had "just gone through" as foreign ministers from the 27-nation bloc agreed a one-year suspension of measures against almost 500 individuals and more than 800 firms.
The decisions are intended to reward Myanmar for sweeping reforms in the one-time pariah nation that culminated in opposition leader Aung San Suu Kyi's election to parliament on April 1.
"As a means to welcome and encourage the reform process, the Council will suspend restrictive measures imposed on the government, with the exception of the arms embargo, which it will retain," said a statement adopted by the ministers.
The EU "will monitor closely the situation on the ground, keep its measures under constant review and respond positively to progress on ongoing reforms," the statement added.
Myanmar's parliament reopened on Monday with opposition leader Aung San Suu Kyi refusing to take a seat, as her party has refused to swear to "safeguard" an army-created constitution.