Jeffrey Feltman, the acting assistant secretary of state for near eastern affairs, told Imad Mustafa, Syria's ambassador to Washington, of the decision on Tuesday.
Mustafa, said that US-Syrian relations "were headed in the right direction".
But, he said, "It is still difficult to talk about radical change in the relationship but we can talk about advancing in small, but consecutive and positive steps.''
A senior Obama administration official had earlier told the CNN televison news channel: "It's in our interests to have an ambassador in Syria."
"We have been having more and more discussions and we need to have someone there to engage," the official said.
He said the decision to increase direct ties was not related to the election crisis in Iran, although the Obama administration has maintained that engagement with the Syrian regime could weaken Syria's strategic alliance with Iran.
Speaking to Al Jazeera before he was informed of Obama's decision, Mustafa said that having a US ambassador in Syria would reflect a genuine desire by the US to engage with Damascus.
|Mustafa, pictured, said the decision is "good for the US, good for Syria and good for the region"
"It is good for the United States to have an ambassador in Syria .. to enhance bilateral relations and it's also a reflection on the erroneous ways of the Bush administration [the previous US administration]," he said.
Washington withdrew its ambassador from Syria in 2005 in protest against the assassination of Rafiq al-Hariri, a former Lebanese prime minister.
Under international pressure, Syria withdrew soldiers from Lebanon following the killing and has denied any involvement.US-Syria talks
Relations between Syria and the US improved after Obama took office in January and US officials said he was committed to seeking a peace deal between Syria and Israel as part of an overall Middle East peace deal.
The Syrian government, however, remains under US sanctions, partly because of what Washington describes as a Syrian role in helping foreign fighters infiltrate Iraq.
The decision to appoint a US ambassador follows a series of recent visits to Damascus by high-level US military and diplomatic delegations, including a recent visit by George Mitchell, the US Middle East envoy.
Mitchell's visit took place in the wake of Obama's Cairo speech to the Muslim world, where he pledged to pursue a broad-based, comprehensive peace agreement in the region.
"All of theses talks, the quality of the discussion and the level of engagement has been unprecedented, at least for the last eight years," Mustafa said.