The statement was read over national television on Monday, as Cuban leader Fidel Castro made his first public appearance since undergoing surgery for his knee after a fall last week.
Holding US dollars will remain legal, but using them in commercial transactions will be banned, the statement said.
Cubans will have to use the so-called convertible peso, a local currency pegged in value to equal the dollar on the island but with no value internationally.
Other foreign currencies will still be accepted for business-to-business sales.
“It is important to denounce the schemes of the [American] empire” against Cuba, Castro said in televised remarks, slamming the 40-year-old US embargo on the island.