The news came as Myanmar's de facto leader, Aung San Suu Kyi, arrived in Washington on her first official visit.
Myanmar's access to trade benefits for poorer nations had been suspended in 1989 over human rights abuses.
President Obama said the country should now be allowed to benefit from preferential tariffs as it emerges from decades of military rule.
He confirmed the move in a letter to Congress on Wednesday, adding Myanmar - also known as Burma - to the Generalised System of Preferences, a list which exempts certain countries from high import taxes.
Though many companies will now enjoy lower tariffs, there are some sanctions which remain in place.
These include a "blacklist" of at least 100 companies and individuals with links to the former military junta, as well as trade in jade and rubies.
President Obama said the lifting of some sanctions would happen "soon", but did not give further details.
"It is the right thing to do to ensure the people of Burma see rewards from a new way of doing business, and a new government," he said.
He also paid tribute to the efforts made towards peace in the country, and the "enormous potential" of the country.
Ms Suu Kyi called on the US Congress to eliminate all remaining sanctions against Myanmar.
"Unity also needs prosperity," she said. "People, when they have to fight over limited resources, forget that standing together is important."
"We think that the time has come to remove all of the sanctions that hurt us economically," she said.
Ahead of Aung San Suu Kyi's visit, Human Rights Watch said the sanctions targeted military officials, and "shouldn't be fully lifted until the democratic transition is irreversible."
Ms Suu Kyi, who as opposition leader was kept under house arrest for 15 years, led her National League for Democracy party to victory in Myanmar's first openly contested election for decades in November 2015.
She is barred from the role of president under the country's constitution - instead holding the title of state counsellor - but is widely seen as the country's leader in all but name.
Long-standing trade sanctions against Myanmar are to be lifted, US President Barack Obama has said.