The Obama administration says it is lifting the six-month moratorium on deep water oil drilling in the Gulf of Mexico imposed after the BP oil spill.
The administration has been under heavy pressure from the industry and others in the region to lift the ban on grounds it has cost jobs and damaged the economy.
A federal report said the moratorium likely caused a temporary loss of 8,000 to 12,000 jobs in the Gulf region.
The administration also imposed new rules on offshore drilling late last month. Drilling is unlikely to resume immediately.
Michael Bromwich, director of the agency that oversees offshore drilling, said it would take "at least a couple of weeks" after the ban is lifted before permits are approved.
The new rules take effect immediately and include requirements that oil rigs certify that they have working blowout preventers and standards for cementing wells.
The cementing process and blowout preventer both failed to work as expected in the Gulf spill.