The U.N. Security Council voted unanimously on Friday for a resolution that also establishes a U.N. mission in Libya to help the North African nation get back on its feet after the overthrow of Muammar Gaddafi.
The resolution begins lifting punitive measures imposed on the oil-exporting country six months ago when Gaddafi was overseeing a crackdown against pro-democracy demonstrators.
Despite arguments among council members since then over the application of previous resolutions, especially NATO's bombing of Gaddafi's forces, the council came together after Libya's former rebels established control over most of the country.
In Friday's resolution, the council declared "its determination to ensure that assets frozen pursuant to (U.N. sanctions resolutions) shall as soon as possible be made available to and for the benefit of the people of Libya."
Earlier on Friday, the U.N. General Assembly approved a Libyan request to accredit envoys of the country's interim government as Tripoli's sole representatives at the world body, effectively recognizing the National Transitional Council.
Both actions "make clear the international community's determination to support the new Libyan authorities, and the Libyan people," British Foreign Secretary William Hague said in a statement.
The Security Council resolution lifts all sanctions against the Libyan National Oil Corp and Zueitina Oil Co as part of what British Ambassador Mark Lyall Grant said was an effort to "help kick-start Libya's economy and encourage economic self-sufficiency."
The British-drafted text also partly eases sanctions on the central bank and other Libyan institutions, although special approval by the Security Council's Libya sanctions committee will still be needed to unfreeze their seized assets.
The committee has already authorized the emergency unfreezing of some $16 billion of Libyan assets, held mainly by Western countries, Security Council diplomats say.
But some measures are being kept "to ensure that previously frozen funds are released in a transparent and responsible way as the situation normalizes and the transition proceeds," U.S. Ambassador Susan Rice told the council.
Diplomats said one problem with immediately unfreezing all assets was confusion in some cases about exactly who would be able to benefit from them.
An arms embargo will remain in place, but Libya's interim government and the United Nations will be allowed to import light weapons to maintain security.
The resolution establishes a U.N. mission in Libya, which diplomats say will consist of up to 200 people in an initial three-month phase to help the government with a post-conflict transition. Their tasks are expected to include police training and electoral assistance, U.N. officials say.
The resolution does not call, however, for the deployment of peacekeepers or police as part of the new U.N. Support Mission in Libya.
Nor does it call for an end to the no-fly zone a March resolution imposed over the country, although diplomats say Libyan civil airliners will be allowed to fly provided they notify monitors of their flight plans.
Russian Ambassador Vitaly Churkin, a prominent critic of NATO's air campaign in Libya, called for the prompt lifting of the no-fly-zone and also voiced concerns about human rights violations in Libya.
"It's becoming increasingly clear that crimes were being committed by all parties to the conflict," he said.
The National Transitional Council was represented at the Security Council meeting by Ibrahim Dabbashi, Libya's deputy U.N. ambassador whose defection to the rebels in February inspired dozens of his country's diplomats worldwide to denounce Gaddafi.
"A period of terror, of denial of freedom and violation of human rights has now come to an end for the Libyan people," Dabbashi told the council.
He said Libya was the first instance of the much-quoted but seldom-applied U.N. "responsibility to protect" principle, "which was done in a reasonable manner, which saved the lives of thousands of Libyans and the sovereignty and territorial integrity of Libya."