(CNN) -- The United States and Myanmar will exchange ambassadors for the first time since 1988 in the wake of the Asian country's release of 220 political prisoners, Secretary of State Hillary Clinton announced Friday.
Clinton called the freeing of the prisoners a "momentous day" for Myanmar and announced the beginning of the process for establishing embassies.
Myanmar released 220 political prisoners on Friday -- thought to be the largest number ever in the country's history -- in an apparent bid to soften international criticism over human rights and ease economic sanctions.
A total of about 300 political prisoners were expected to be released as part of an amnesty deal, said Tate Naing, a spokesman for the Assistance Association for Political Prisoners.
The prisoners' release is part of a series of political reforms initiated under a new government, and while President Barack Obama praised Friday's freeing of the prisoners, U.S. officials and opposition figures in Myanmar have remained wary of the government's sincerity.
The United States downgraded its diplomatic mission in Myanmar in 1988, when the country underwent a military coup and violently suppressed pro-democracy demonstrations. Since then, the American government has imposed broad economic sanctions against the country.
Among prisoners already freed is former Prime Minister Khin Nyunt, as well as Ko Ko Gyi and Mo Ko Naing, student leaders during the 1988 pro-democracy protests that thrust opposition leader Aung San Suu Kyi onto the world stage.
A presidential pardon has granted amnesty to 651 prisoners in Myanmar, also known as Burma, though not all of those detained are identified as so-called prisoners of conscience.
While calling the action "one of the largest releases of political prisoners in Asia's history," a senior State Department official said the United States needs to verify their names and conditions.
"We are being careful," the official said. "We obviously welcome this but want to see the full details."
Since Clinton's December visit to Myanmar, the United States has asked for greater access for international humanitarian organizations like the International Committee of the Red Cross to monitor the situation on the ground, the official said. It also has called on the government to announce a date for elections and increase interaction with the country's ethnic groups.
The official pointed to the April 1 election date and the recent cease-fire with the Karen National Union, which he called one of the "longest running insurgencies on the planet," as evidence the government is serious about reform.
Democracy activists, observers say, were expected to be freed throughout the day -- one of the preconditions western government have insisted upon before sanctions could be lifted.
Opposition leader Khun Tun Oo and activist monk U Gambira, whose imprisonments have long prompted condemnation from rights groups, were also released Friday, Naing said.
"All citizens of Burma... are very happy to hear that there are so many political prisoners released today," said Nyan Win, a spokesman for the opposition National League for Democracy party.
Those freed included NLD members, he said.
Obama described the release of political prisoners "a substantial step forward for democratic reform."
"I applaud President Thein Sein's decision to release hundreds of prisoners of conscience, which is a crucial step in Burma's democratic transformation and national reconciliation process," Obama said in a statement.
"I urge the government to ensure that these and all other former political prisoners are allowed to participate fully and freely in the political process, particularly the upcoming by-elections, and to free all remaining prisoners of conscience," Obama said.
The agreement with the Karen National Union has been widely seen as another attempt by the nominally civilian government to gain greater international credibility. The Karen will now be permitted to travel throughout the country, but without weapons, a government official said.
Karen leaders and activists said it was too early to gauge whether peace would take hold.
One of eight prominent ethnic groups in Myanmar, the largely Christian Karen have been fighting in the country's eastern jungles for greater rights since the nation's independence from Britain in 1948.
National reconciliation has been a key demand of democracy leaders as well as Western powers, including the United States.
The cease-fire agreement Thursday came on the same day Suu Kyi's party said it will participate in upcoming elections. It said it plans to announce a roster of 23 candidates, including Suu Kyi, with 48 seats up for grabs.
Ruled by a military junta since 1962, Myanmar is now under Sein, a former general elected in March 2011. The new government has instituted rapid reforms but the verdict is still out on whether they are genuine or merely moves to appease critics.
In October, the government granted a mass amnesty, which authorities say will eventually free 6,300 prisoners.
"The government is striving for emerging good governance and clean government, flourishing of democratic practices, ensuring rule of law, making economic reform and motivating environmental conservation in building a new peaceful, modern, and developed discipline-flourishing democratic nation," the president said then.
Last week, Suu Kyi met with William Hague, the first British foreign secretary to visit Myanmar in more than 50 years.
Thursday's announcement coincides with a meeting between U.S. diplomats and Suu Kyi, a Nobel Peace Prize winner and the face of democracy in Myanmar.
Suu Kyi had lived most of the past two decades under house detention. She was released in 2010.
While in Myanmar, Clinton spoke with the government about some initial steps the United States could take, including addressing the recovery of remains of American soldiers from World War II and sending assessment teams to address capacity building in the country. The United States is working with nongovernmental organizations on some of these issues, the senior State Department official said.
The Obama administration will begin a dialogue with Congress about the steps involved in lifting sanctions, should the government continue with promised reforms, the official said.
"It's important not to over-promise and under-deliver," the official said, adding that Myanmar is one of the most heavily sanctioned countries in the world.
Thomas Countryman, assistant secretary for International Security and Nonproliferation, is traveling to the country next week to discuss Myanmar's military relationship with North Korea, the official said. The administration has voiced concern about the countries' military ties and North Korean missile sales to Myanmar.
CNN's Moni Basu, Michael Martinez and Jill Dougherty contributed to this report.