WASHINGTON — President Obama will announce Wednesday that the U.S. and Cuba have finalized an agreement to reopen embassies in each other’s capitals, a major step in ending hostilities between the Cold War foes, a senior administration official said.

The U.S. and Cuba have been negotiating the reestablishment of embassies following the historic December announcement that they would move to restore ties after a half-century of animosity.

Cuban and American flags wave at the Hotel Saratoga in Havana. President Obama will be announcing an agreement to open embassies in Havana and Washington.

For Obama, ending the U.S. freeze with Cuba is central to his foreign policy legacy as he nears the end of his presidency. Obama has long touted the value of direct engagement with global foes and has argued that the U.S. embargo on the communist island just 90 miles south of Florida was ineffective.

Since the late 1970s, the United States and Cuba have operated diplomatic missions called interests sections in each other’s capitals. The missions are technically under the protection of Switzerland, and do not enjoy the same status as full embassies.

While the opening of embassies marks a major milestone in the thaw between the U.S. and Cuba, significant issues remain as the countries look to normalize relations. Among them: talks on human rights; demands for compensation for confiscated American properties in Havana and damages to Cuba from the embargo; and possible cooperation on law enforcement, including the touchy topic of U.S. fugitives sheltering in Havana.

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