"The United States is responding to North Korea's actions with two actions of its own. I'm issuing a proclamation that lifts the provisions of the Trading With The Enemy Act ... secondly, I am notifying congress of my intent to rescind North Korea's designation as a state sponsor of terrorism in 45 days.
"During this period, the United States will carefully observe North Korea's actions, and act accordingly."
'More information needed'
The US actions would depend on verification of continued North Korean moves towards its nuclear disarmament, Bush said.
"North Korea must dismantle all of its nuclear facilities, give up its separated plutonium, resolve outstanding questions on its highly enriched uranium and proliferation activities, and end these activities in a way that we can fully verify"
George Bush, US president
"The two actions the United States is taking will have little impact on North Korea's financial and diplomatic isolation ... All United Nations Security Council sanctions will stay in place as well," he said.
"North Korea must dismantle all of its nuclear facilities, give up its separated plutonium, resolve outstanding questions on its highly enriched uranium and proliferation activities, and end these activities in a way that we can fully verify."
The North Korean report delivered to Chinese officials is a truncated version of a declaration originally sought by Washington.
Melissa Chan, Al Jazeera's correspondent in Beijing, said: "What we are seeing is a report that does not answer any questions about the North Koreans' nuclear enrichment programme; it does not specifically say how many nuclear warheads they have. So there is an avoidance of issues here.
"Even though the Americans have been counting this [report] as progress, some critics say the report is not a full disclosure of what the North Koreans have been up to in the past few years.
"Others say the six-party talks are a diplomatic process that will last for some time and any sort of development of this kind should be welcomed as a positive move."
The handover of the North Korean declaration is a significant step in the implementation of a six-party nuclear disarmament pact signed early last year.
China hosted talks that secured the deal offering North Korea diplomatic and economic incentives to disable its main nuclear facility and declare all related programmes.
The removal of North Korea from the US terrorist-sponsor list could ease international trade and financial restrictions, as well as improving ties between Pyongyang and Washington.
Japan has expressed unease over Pyongyang being taken off the US blacklist before the issue of its citizens being kidnapped by North Korea is resolved.