The Trump administration said the decision came after a 16-month effort that showed Sudan was "serious" about promoting regional stability. Officials in Sudan say that since the September 11, 2001, attacks, the Sudanese have been cooperating with US intelligence.
The Sudanese foreign ministry said it was looking forward to building "a normal relation with the United States, but wants its name to be removed from the list of state sponsors of terrorism as there is no reason to have Sudan in that list".
According to Nauert, the U.S. action "came about through a focused, 16-month diplomatic effort to make progress with Sudan in these key areas".
Sudan's president, Omar al-Bashir, is known to have once hosted slain al-Qaeda leader Osama bin Laden, and is himself wanted by the International Criminal Court over war crimes charges. However, much more progress is needed to fully and sustainably achieve peace in Sudan and to cooperate with the United States on a range of Administration priorities, including further expanding humanitarian access, improving the Government of Sudan's human rights and religious freedom practices, and ensuring that the Government of Sudan is committed to the full implementation of UN Security Council resolutions on North Korea.
The US extended the sanctions regime a decade later over the Darfur conflict.
Sudan has also agreed not to seek arms deals with North Korea.
Washington first imposed sanctions on Khartoum in 1997 over its alleged support for Islamist militant groups.
Shortly before leaving office, former President Barack Obama temporarily eased penalties that had been in place for 20 years against the African nation.
The U.S. had worked to isolate Sudan since the military coup that brought al-Bashir to power in 1989. The government has announced unilateral cease-fires in areas where the Sudanese army has been fighting rebels, and created more access for humanitarian aid to get to displaced civilians. But last month the administration issued a new list and Sudan was the only country from the original list to be freed from the ban.
The United Nations says 300,000 people have died in the conflict and 2.7 million have fled their homes.