The United States has told Sudan it will remove it from its list of state sponsors of terrorism, if January's referendum on southern independence is conducted transparently and on time.
The offer, delivered by Senator John Kerry, was part of a proposal to help resolve disputes over the referendum.
Southern Sudanese politicians have insisted that the vote must go ahead.
A vote is also supposed to be held on whether the oil-rich region of Abyei should join the north or the south.
The two referendums are the result of the 2005 Comprehensive Peace Agreement (CPA), which ended the 21-year civil war between north and south, which left an estimated 2 million people dead.
'Pay-for-performance operation'
Sudan was added to the US list of state sponsors of terrorism in 1993 after it was accused of harbouring Islamist militants. At the time, Osama Bin Laden and his al-Qaeda network were among those based there.
Four years later, the US imposed comprehensive economic, trade, and financial sanctions against Sudan, citing its continued support for terrorism. Separate sanctions were imposed in 2007 over the conflict in the western region in Darfur.
Correspondents say the economic impact on the country is of great concern to President Omar al-Bashir and his National Congress Party.
On Sunday, US officials said President Barack Obama had offered to remove Sudan from its list of state sponsors of terrorism as early as July 2011, and lift the related sanctions, if the north ensured the two parallel referendums took place as scheduled on 9 January and that it accepted the outcomes.
Sen Kerry, chairman of the Senate Foreign Relations Committee, passed on the offer during a visit to Khartoum over the weekend.
"We like to consider this a pay-for-performance operation," one US official told the Reuters news agency.
The sanctions relating to Darfur - which Mr Obama extended for another year on 1 November - would reportedly remain until the government made progress in resolving the humanitarian situation there.
The UN estimates that up to 300,000 people have died in the civil conflict since 2003.
Last month, Sen Kerry said the goal of the US was to "see a peaceful Sudan, one with which we can have a normal relationship".
