President Obama lifted the 41-year-old U.S. arms embargo against Vietnam Monday in an apparent effort to shore up the communist country's defenses against an increasingly aggressive China. 

Obama announced the full removal of the embargo at a news conference in Hanoi alongside Vietnamese President Tran Dai Quang. The American president said the move was intended as a step toward normalizing relations with the former enemy and to eliminate a "lingering vestige of the Cold War."

Obama added that every U.S. arms sale would be reviewed on a case-by-case basis.

U.S. lawmakers and activists had urged Obama to press for greater human rights freedoms in the one-party state before lifting the embargo. Vietnam holds about 100 political prisoners and there have been more detentions this year.

Washington partially lifted the embargo on arms in 2014, but Vietnam wanted full access as it tries to deal with China's land reclamation and military construction in the disputed South China Sea. Vietnam has not bought anything, but removing the remaining restrictions shows relations are fully normalized and opens the way to deeper security cooperation.

"At this stage both sides have developed a level of trust and cooperation, including between our militaries, that is reflective of common interests and mutual respect" Obama said.

Obama said the United States and Vietnam had mutual concerns about maritime issues and the importance of maintaining freedom of navigation in the South China Sea. He said that although Washington doesn't take sides on the territorial disputes, it does support a diplomatic resolution based on "international norms" and "not based on who's the bigger party and can throw around their weight a little bit more," a reference to China.

Lifting the arms embargo will be a psychological boost for Vietnam's leaders as they look to counter an increasingly aggressive China, but there may not be a big jump in sales. 

Obama was greeted Monday by Quang at the Presidential Palace, where Obama congratulated Vietnam for making "extraordinary progress." Quang praised the expansion in security and trade ties between "former enemies turned friends" and called for more U.S. investment in Vietnam. He said there was enormous bilateral trade growth potential.

Obama is the third sitting president to visit Vietnam since the end of the Vietnam War in 1975. Four decades after the fall of Saigon, now called Ho Chi Minh City, and two decades after President Bill Clinton restored relations with the nation, Obama is eager to upgrade relations with an emerging power whose rapidly expanding middle class beckons as a promising market for U.S. goods and an offset to China's growing strength.

The United States is eager to boost trade with a fast-growing middle class in Vietnam that is expected to double by 2020. That would mean knocking down auto, food and machine tariffs to get more U.S. products into Vietnam.

During his three days in Vietnam, Obama will make the case for stronger commercial and security ties, including approval of the 12-nation Trans-Pacific Trade agreement that is stalled in Congress and facing strong opposition from the 2016 presidential candidates.

The Associated Press contributed to this report.