President Barack Obama on Thursday declared a new chapter in U.S. relations with Myanmar, easing an investment ban and naming the first U.S. ambassador to the former pariah state in 22 years to reward it for democratic reforms.

Both Republican and Democrat senators welcomed the administration's move, but human rights activists said it was premature to reward a government that remains dominated by its military and still holds hundreds of political prisoners.

Myanmar opposition leader Aung San Suu Kyi's election to parliament last month has prompted Western governments to roll back years of hard-hitting restrictions against the Asian nation also known as Burma, which is emerging from decades of authoritarian rule and diplomatic isolation.

After meeting Myanmar's foreign minister, Wunna Maung Lwin, Secretary of State Hillary Rodham Clinton said that the U.S. was suspending sanctions on export of American financial services and investment across all sectors of the Myanmar economy — including in the resource-rich country's lucrative oil, gas and mining sectors.