The United States dropped Cuba from its blacklist of state sponsors of terrorism on Friday, removing yet another hurdle as the two countries seek to restore diplomatic ties frozen for five decades.

The United States dropped Cuba from its blacklist of state sponsors of terrorism on Friday, removing yet another hurdle as the two countries seek to restore diplomatic ties frozen for five decades.

Cuba has vehemently protested its 1982 inclusion on the blacklist and had demanded that the decision be rescinded.

US Secretary of State John Kerry confirmed that effective Friday a "final decision" had been taken to remove Cuba from the list, after President Barack Obama in April gave Congress 45 days to object.

Only Iran, Sudan and Syria still remain on the terror blacklist.

However, a tight economic embargo slapped on the communist-run Caribbean island in 1962 remains in place, meaning there may be little immediate effect from Friday's historic decision.

"The lifting of the state sponsor of terrorism designation does not lift the embargo, just to put that kind of bluntly," State Department press office director Jeff Rathke told reporters.

He also highlighted that there still remained "a web of restrictions and sanctions that have been applied over the years, and some of them are unrelated to the state sponsor of terrorism designation."

Obama and Cuban President Raul Castro agreed in December to restore relations, and the two leaders held ground-breaking talks on the sidelines of an April summit in Panama.