US travellers visiting Cuba can now bring home more of the island's famous cigars and rum, under revised regulations issued Friday in Washington, as President Barack Obama ordered further normalization of relations with the communist island.

The US Treasury and Commerce departments issued revised regulations for trade and financial transactions with Cuba, further loosening decades-old restrictions since the 2014 rapprochement between Washington and Havana.

"Challenges remain - and very real differences between our governments persist on issues of democracy and human rights - but I believe that engagement is the best way to address those differences and make progress on behalf of our interests and values," Obama said.

"The progress of the last two years, bolstered by today's action, should remind the world of what's possible when we look to the future together."

Obama's presidential directive on US policy replaces all previous, sometimes classified policy directives on Cuba.

He said that the policy would "promote engagement with the Cuban government and people, and make our opening to Cuba irreversible."

Revised regulations taking effect Monday are meant to boost trade and investment opportunities, expand scientific collaboration and allow greater humanitarian support for impoverished Cuba, which has slowly been opening its communist economy to market forces.

"The Treasury Department has worked to break down economic barriers in areas such as travel, trade and commerce, banking, and telecommunications," Treasury Secretary Jacob Lew said.

"Today's action builds on this progress by enabling more scientific collaboration, grants and scholarships, people-to-people contact, and private sector growth. These steps have the potential to accelerate constructive change and unlock greater economic opportunity for Cubans and Americans."

The new regulations will give Cubans greater access to US goods and services, Commerce Secretary Penny Pritzker said.

US leisure tourism to Cuba remains banned, but restrictions were relaxed last year on travel for educational, humanitarian and other purposes.

Under Friday's announcement, travellers returning to the US from Cuba can carry up to 100 cigars and one litre of alcohol duty free for personal use. Previously, the combined value of Cuban alcohol and tobacco was limited to 100 dollars, with a 400-dollar cap on all goods.

Now, US travellers can bring home up to 800 dollars in Cuban goods duty free - the same as on trips to other countries - and can legally carry more by declaring the value and paying import duties.

Bans on US travellers bring home Cuban goods from other countries - such as cigars and rum commonly sold in European airport shops - are lifted.

Obama and Cuban President Raul Castro reached an agreement in late 2014 that began the ongoing thaw in relations.

The United States has increasingly relaxed prohibitions on commerce and travel with the communist island, with both nations reopening their respective embassies last year. A trade embargo that can only be lifted by the US Congress remains in place.

"Even as we continue to call on the Cuban government to make their own reforms, let's lead by example and make our own," Susan Rice, Obama's national security adviser, said Friday in a speech at a Washington think tank. "Congress should do its part. We must lift the embargo, once and for all."

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