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In a memo to Secretary of State John Kerry, Obama said he has determined that supplying defence equipment and services to "will strengthen the security of the United States and promote world peace."
The move doesn't immediately provide new assistance to Somalia, but allows Kerry to consider taking that step in the future.
"The United States is committed to being a long-term partner in assisting the defence forces in Somalia defence to become a professional military force," said National Security Council spokeswoman Caitlin Hayden.
Obama's decision was not tied to any new threat assessment in Somalia, said a senior administration official. The move follows a decision by the U.N. Security Council in March to partially suspend the arms embargo on Somalia for 12 months, after Somali officials appealed to the U.N. to suspend the embargo. The council preserved a ban on exports of a list of heavy military hardware, including surface-to-air missiles, anti-tank guided weapons and night-vision weapons.
The U.S. government has provided funds and training to African Union forces fighting al-Shabab in Somalia, and has also provided more than $133-million to Somalia since 2007 in security sector assistance, intended to help the country build up and professionalize its security forces.