The US is restoring the diplomatic relations it severed with Cuba more than 50 years ago, despite resistance from mainly Republican lawmakers opposed to reconciling with the communist-run island.
Praise has come for the decision from Cubans exiled in the US and widely abroad, particularly in the European Union, and from others.
After 18 months of secret talks facilitated by the Vatican and Canada, Mr Obama and Cuban President Raul Castro last week agreed by phone on a prisoner exchange and the opening of embassies in each other's country.
United Nations Secretary-general Ban Ki-moon praised Mr Obama for what he called courage and vision in renewing ties with Cuba and said he had asked Washington to pursue such a course.
Cuban President Raul Castro also demonstrated leadership in reciprocating the opening, Mr Ban said.
''I highly commend President Obama's very courageous visionary decision to address this issue. At the same time I really appreciate President Raul Castro. He has shown great humanity and leadership this time,'' Mr Ban said.
Cuba has been praised for its humanitarian efforts in sending hundreds of healthcare workers to West Africa to fight the worst outbreak of the Ebola virus on record.
For its size, Cuba supplies an enormous amount of humanitarian aid around the world, assisted by oil subsidy payments from Venezuela.
But times are changing for Venezuela with the US squeezing hard, even as it opens ties with Cuba.
The policy shift will mean an opening to some commerce and transportation and travel restrictions will be eased.
It will not be all smooth going from here however, with Mr Obama not anticipating overnight changes in Cuba.
The Cuban Government is not planning to change the way it operates and Mr Obama says Cuba still represses its citizens.
With Republicans set to gain control over the two houses of the United States Congress, Mr Obama has been already labelled a lame-duck president.
However, he may just surprise some of his opponents, who are gearing up to defeat the president on almost every proposal he suggests.
And Mr Obama's move may bolster Democratic hopes of retaining the support of Latino voters as the party looks ahead to the presidential election in 2016.
The main support for change has come from Democrats, although there is now a rift developing in Republican ranks as two of the party's top House hopefuls clashed sharply over Mr Obama's new Cuba policy, evidence of growing differences over foreign affairs shaping the party's 2016 presidential primaries.
Jeb Bush, the son and brother of former presidents and a potential candidate himself, did not think the US should be negotiating with a repressive regime.
Senator Rand Paul, from Kentucky, who backs Mr Obama's move to normalise relations with communist Cuba, accused Senator Marco Rubio, from Florida, of being an ''isolationist'' with his hardline opposition to opening up trade and diplomatic engagement with the island nation.
Mr Paul suggested Mr Rubio wants to retreat to US borders and perhaps build a moat.
The Senate may hold up the appointment of an ambassador to Cuba, as Republicans have done to Mr Obama's nominations throughout 2014.
Other options include writing funding restrictions into a budget Bill or trying to pass stand-alone legislation seeking to preserve Cuba's isolation.
Mr Obama will almost certainly veto such legislation.
The largest obstacle will be lifting the trade embargo, which has been enshrined in legislation since 1996.
Mr Obama has urged a repeal of the law but that is unlikely.
But Cuba may just be the start for Mr Obama, who has limited time left to create his own presidential legacy.
His actions towards the island nation controlled by the Castro family have been globally welcomed.
Undoubtedly, he will have more items on his 2015 agenda to surprise the world.
