of appropriations may now return to work," Sylvia M Burwell, OMB Director, said in a memorandum.
The bill was passed hours before the US Government was to exhaust its borrowing capacity.
"This is good news for developing countries and the world's poor. The global economy dodged a potential catastrophe," said World Bank President Jim Young Kim, reflecting a sigh of relief.
IMF Managing Director Christine Lagarde said looking forward, it will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner.
In addition to lifting the USD 16.7 trillion debt limit, the bill approves the government funding through January 15.
It also has provision for employees being paid for the period they were furloughed.
"We'll begin reopening our government immediately, and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people," Obama had earlier told reporters at the White House.
Obama said politicians in Washington have to "get out of the habit of governing by crisis."
"Hopefully, next time, it will not be in the 11th hour," Obama told reporters, calling for both parties to work together on a budget, immigration reform and other issues.
As he left the podium, Obama was asked whether he believed America would be going through all this political turmoil again in a few months. He replied, "No."
The end to the fiscal impasse is being described in the US media as a defeat of the Republican party.
"Congressional Republicans conceded defeat on Wednesday in their bitter budget fight with President Obama over the new health care law," The New York Times wrote.
The shutdown have come at a steep cost, with Standard and Poor's putting it at USD 24 billion out of the economy.