Libya has handed over a letter to a United Nations Security Council meeting formally taking responsibility for the Lockerbie bombing in 1988.
The 1988 Lockerbie bombing killed 270 people
The United States and Britain also delivered letters to the Syrian president of the Security Council declaring that Libya had met the conditions required to lift UN sanctions by accepting full blame for the Lockerbie bombing and renouncing terrorism.
British ambassador to the UN Emyr Jones Parry said the next step was for Britain to circulate a draft resolution lifting UN sanctions, possibily on Monday.
The letter is part of a deal to compensate families of the 270 victims of the bombing of Pan Am Flight 103 over the Scottish town, with Libya pledging to transfer $2.7bn (£1.7bn) to a Swiss bank account.
It contains few details of the exact role of the Libyan Government in the bombing, but states: "Libya as a sovereign state has facilitated the bringing to justice of the two suspects charged with the bombing and accepts responsibility for the actions of its officials."
But earlier, the US said earlier it would keep its own sanctions against Libya in place until there were further substantial changes in the nature of the Tripoli regime.
Washington said it still had "serious concern" over the behaviour of the Libyan regime, citing its "poor human rights record" and " its continued and worrisome pursuit of weapons of mass destruction".
In a further development, Libya objected strongly to an intervention by France into the negotiations over the compensation deal.
Libyan Foreign Minister Abdel Raman Shalgan accused Paris of blackmail for insisting that the deal for the families of the Lockerbie victims should be matched by similar compensation for the shooting down of a French airliner over Niger in 1989, in which 170 people died.
The sum which Libya agreed last year to pay to France for the Niger bombing was $33m.
Families' mixed response
Eileen Minetti, whose son died in the atrocity, says the deal was not perfect but she was still pleased.
"We have come a lot further than that anybody ever thought and got a lot more justice than anyone thought we would ever get 15 years ago," she told the BBC.
Total of $2.7bn (£1.7bn) for 270 victims' families, paid in stages
About $1bn (£675m) when UN lifts sanctions
Further $1bn once the US lifts its sanctions
The rest when Libya removed from list of terror states
"I remember people standing in my kitchen telling me we would never know who did it, we would never know how it was done; just accept it and get on. I'm sure glad we never did."
Some families were pleased that the US would not be ending its own sanctions against Libya. But others said the deal would let Libyan leader Colonel Muammar Gaddafi "off the hook" and were refusing to accept part or all of the cash.
In London, British families of the disaster victims met UK Foreign Office officials to discuss the deal - which could see them receive about £6m each.
The Rev John Mosey, whose 19-year-old daughter Helga died in the bombing, said his family would accept the compensation and he was pleased the settlement would enable Libya to return to the international community.
But he said the families would continue to push for an independent inquiry into the bombing.
"For some, I hope the compensation will bring closure. For many of us, it is almost a distraction to finding the truth about why this horrendous thing was allowed to happen in the face of 10 warnings. Why was nothing done?"
The first instalment of the deal, worth £675m, could be released as early as next week when the Security Council is expected to announce the lifting of UN sanctions.
The remaining £1bn will come in two further stages - once the US lifts its own sanctions on Libya and removes the country from its list of states sponsoring terrorism.