The United States and Cuba on Wednesday began talks on re-establishing diplomatic relations and eventually repealing a 53-year-old trade embargo, international news outlets reported.

The level of the US delegation to Cuba is the highest for the last 35 years, marking the next step in the historic thaw of relations between the Cold War-era adversaries announced last month.    

Roberta Jacobson, the top US diplomat for Latin America and the first Assistant Secretary of State to visit Cuba in 38 years, is leading the US team, while Cuba's delegation is led by the country’s chief diplomat for US affairs, Josefina Vidal.

"We are ending a policy that was long past its expiration date,” US President Barack Obama said in his State of the Union address on Tuesday. “When what you’re doing doesn’t work for 50 years, it’s time to try something new."

Immigration issues were on the agenda for Wednesday’s talks. Restoration of diplomatic relations, including the reopening of the respective embassies closed after relations broke in 1961, will be discussed on Thursday. Both nations currently have "interests sections" in each other's capitals.

In addition to discussing the opening of respective embassies in Washington D.C and Havana, the two delegations are expected to set the stage in the next few months for a visit by US Secretary of State John Kerry to the Cuban capital.

The talks in Havana follow the decision by Barack Obama and Cuban leader Raul Castro to seek normalization of relations which was unveiled last month.

The talks could lead to "re-established relations," but dealings between the two countries cannot be considered normalised until the US trade embargo is fully lifted, a high-ranking official of Cuba’s foreign ministry told CNN on Tuesday, speaking on condition of anonymity.