He enacted promises given last month to ease investment restrictions but he warned that the US remained “deeply concerned” over a lack of transparency.
Mr Obama was rewarding the Burmese government for its recent reforms and release of political prisoners.
Burmese President Thein Sein urged Western countries to scrap all sanctions against his country.
“It is extremely important that sanctions be lifted – both financial and other economic sanctions – to make possible the sort of trade and investments that this country desperately needs at this time,” he said in an interview with the Financial Times.
The US has imposed an arms embargo on Burma, as well as bans on investment and financial services.
Announcing the easing of sanctions on Wednesday, Mr Obama said it sent “a strong signal of our support for reform, and will provide immediate incentives for reformers and significant benefits to the people of Burma”.
But he said that entities belonging to the army or ministry of defence would not be covered by the move.
“In addition, US companies will be asked to report on their activities in line with international corporate governance standards,” the statement added.
Controversial
The Associated Press reports that US firms have been given the go-ahead to invest in projects with state-owned Myanma Oil and Gas Enterprise.
The move would be controversial because Nobel laureate Aung San Suu Kyi last month explicitly urged foreign firms not to do business with the enterprise.
Meanwhile, the first US ambassador to Burma in 22 years, Derek Mitchell, has arrived in the country and met President Thein Sein.