Diplomatic ties between both the nations were severed in 1961.
President Barack Obama would make a formal announcement from the White House at 15:00 GMT on Wednesday, CNN reported.
The re-establishing of embassies is a final step in the full diplomatic thaw President Barack Obama initiated in December. Since then, the US has loosened some travel restrictions to Cuba and allowed for some new economic ties.
Obama announced his decision to remove Cuba from the list of state sponsors of terror last month following a historic meeting with Cuban President Raul Castro during Summit of the Americas held in Panama in April.
Cuba has long demanded to be removed from the blacklist and the review Obama ordered in December was part of the accord he and Castro announced for the normalisation of bilateral relations after a breach of more than 50 years.
The last high-level meeting between US and Cuba took place in 1959, when Fidel Castro met then Vice-President Richard Nixon. Diplomatic relations were badly hit between both the countries in 1961.