The 20-year-old policy allows Cuban migrants who reach US soil to become legal permanent residents after a year.
In exchange, Havana has agreed to start accepting Cubans who are turned away or deported from the US.
The move comes as President Obama tries to continue the thawing of relations with Cuba in his final days of office.
It is unclear where relations between the two countries will go now.
His successor, President-elect Donald Trump, has taken a much tougher stance and could reverse the change.
Until now, this so-called “wet foot, dry foot” policy has applied solely to Cubans.
Other immigrants who come to the US without a visa could be arrested and deported.
A joint statement by the US and Cuba is expected later on Thursday, unnamed officials told Associated Press.