Libyan officials have welcomed a US decision to ease economic sanctions, saying further improvements in relations are now expected.
US oil firms pulled out of Libya in the 1980s
The BBC's Rana Jawad in Tripoli said Libyan officials believe full diplomatic ties with Washington will be restored within the next five months.
The Libyan economy is also expected to grow as US oil firms and banks invest.
The US said Libya's decision to abandon weapons of mass destruction had "made our country and the world safer".
On Friday, Libya's state news agency Jana described Washington's move as a "victory" for the Arab country.
Our correspondent says that, according to an official Libyan source, the move had been expected because all diplomatic developments between the two countries had gone according to plan.
The official went on to say that Libya expected to be removed from the US list of countries that sponsor terrorism within weeks.
Economic analysts say the move will be beneficial to both Libya and the US.
Libya will be able to develop its technology, aviation and oil sectors, while the Americans will gain from exploiting the country's substantial oil wealth.
Friday's action will allow four American oil firms to resume their activities in Libya after an 18-year absence.
Allows resumption of most bilateral commercial activities, financial transactions and investments
Enables US firms to buy or invest in Libyan oil
Allows Libyan students to study in the US
Clears the way for a full US diplomatic presence in Tripoli
Marathon Oil Co, Amerada Hess Corp and Conoco Inc - which operated jointly in Libya as the Oasis Group - and Occidental Petroleum Corp welcomed the US decision.
"We're very pleased that the government has taken this action," said Marathon spokesman, Paul Weeditz.
Oasis production peaked in 1969 at one million barrels a day, and was estimated at just over three quarters of that in 1986.
Oil experts say Libyan production is now only half of what it was in its peak year of 1970 when it reached 3.3 million barrels a day.
Our correspondent says the Libyan people will hope that the latest political and economic developments will improve the employment situation.
But there is a fear that only a few will reap the benefits because foreign investments are largely concentrated in the oil industry.
The US State Department says Libya remains on the list of state sponsors of terrorism because it has not curbed all its ties with terrorist groups.