WASHINGTON — Obama administration officials on Tuesday said they would lift a broad array of sanctions on Myanmar, removing restrictions on state-owned banks and businesses as they seek to reward a historic move toward democracy in a country dominated for decades by brutal military rule.

The moves, to take effect on Wednesday, will allow American individuals, banks and companies to do business with all Burmese financial institutions, easing the flow of exports in and out of Myanmar, formerly known as Burma. It will also enable United States citizens living and working there to pay rent and buy goods without running afoul of the law.

The easing of restrictions is the latest effort by President Obama to use diplomacy coupled with sanctions relief to prod toward greater openness a country that the United States once isolated. That principle was at the heart of Mr. Obama’s agreement last year with Iran, which relaxed sanctions in exchange for restraints on Iran’s nuclear program. It has also been the driving force behind the opening with Cuba.

The Treasury Department’s Office of Foreign Assets Control, which oversees and enforces sanctions, announced the changes related to Myanmar on Tuesday. The democratic process reached a milestone in November with elections in Myanmar and has continued to unfold in recent months with the formation of a new government.