Northern Ireland Security Minister Paul Goggins has described loyalist decommissioning as a "very bold and important step".
Two Northern Ireland loyalist groups, the UVF and Red Hand Commando, have decommissioned weapons, ammunition and explosives, observers have confirmed.
Mr Goggins called the move "very welcome".
"I welcome the leadership of those within those organisations who made this bold step," he said.
Mr Goggins said the UDA still had "some way to go" but were engaged in the process.
The minister said there could be no deals over decommissioning but that the challenge remained to provide investment in hard-pressed communities.
"The gun has been taken out of the equation as regards loyalist communities," he said.
"The political challenge can now be embraced by everybody who has a care about people who live on the edge of society."
The Independent International Commission on Decommissioning (IICD) confirmed on Monday that it had witnessed a "major decommissioning event".
Earlier, both groups said their weapons and explosives were "totally and irreversibly beyond use".
No details were released about the number of arms decommissioned.
In a statement, a spokesman for the commission said: "The IICD can confirm it has witnessed a major decommissioning event involving arms, ammunition, explosives and explosive devices belonging to the UVF and Red Hand Commando.
"The leaderships of both organisations have advised us that the weapons and material put beyond use in our presence include all the arms under their control."
'Big moment'
Northern Ireland Secretary Shaun Woodward said the confirmation of loyalist decommissioning was "a cause for real celebration".
"What the people of Northern Ireland want is these illegal weapons taken off the street - these acts confirmed by General John de Chastelain are very significant and I think it's a big moment in Northern Ireland," he said.
US Secretary of State Hillary Clinton welcomed the move as a "courageous step" and praised unionist politicians for making it possible.
On Saturday, the UVF said the decommissioning was observed by three independent witnesses - from the UK, Ireland and America.
Later that day, the decommissioning body confirmed the UDA had begun getting rid of its weapons - but had not finished the process yet.
It gives grounds for great confidence and it cements our peace process
The Reverend Harold Good
A spokesperson said: "The IICD has witnessed a decommissioning event involving arms belonging to the UDA and the Ulster Freedom Fighters.
"This is a significant move and we look forward to completing the process of putting all UDA/UFF arms beyond use at an early opportunity."
The BBC's Mark Simpson said no details have been released about how many loyalist weapons were decommissioned, which method was used or where it happened.
The commission, headed by retired Canadian general John de Chastelain, was established to oversee the decommissioning of paramilitary weapons, as part of the peace process.
Earlier on Sunday, the Reverend Harold Good, an independent witness on the IICD, said the steps taken by loyalist paramilitaries to give up their arms was another step towards normality in Northern Ireland.
"I think it gives grounds for great confidence and it cements our peace process," he said.
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