By Kim Ghattas
BBC News, Washington
Col Gaddafi was once described by Ronald Reagan as a "mad dog"
US Secretary of State Condoleezza Rice is to make a "historic" first visit to Libya on Friday, the state department has announced.
Her visit will be the first by a US secretary of state to Libya since 1953.
Libya was on the state department list of sponsors of terrorism until 2006, when it abandoned weapons of mass destruction and renounced terrorism.
Earlier this month, Libya agreed compensation for families of the victims of the 1988 Lockerbie bombing.
The deal paved the way for Ms Rice's visit to what was once considered a pariah state.
Libyan leader Muammar Gaddafi, who was described by late President Ronald Reagan as a "mad dog", will host Ms Rice.
The state department said this was proof that the US does not have permanent enemies and showed the success of the Bush administration's non-proliferation policies.
Washington is hoping to show other countries like North Korea and Iran how they could benefit from a rapprochement with the US.
For Libya, it all started in 2003, when Mr Gaddafi decided to give up his weapons of mass destruction and renounce terrorism.
Washington restored diplomatic ties with Libya in 2006 but the last remaining piece of the puzzle was the comprehensive plan agreed by the two countries to compensate relatives of the 270 victims of the bombing of the Pan Am flight over Lockerbie in 1988.
Mr Gaddafi this week also hailed the end of his country's long estrangement from the US, but said all Libya wanted now was to be left alone.