Speaking at a rally in Miami on Friday, Trump said: "Last year I pledged to be a voice against oppression, and here I am like I promised. Now that I am your president ... We will stand with the Cuban people in the struggle for freedom.
"Effective immediately, I am cancelling the last government's one-sided deal with Cuba."
"We won't lift sanctions on the Cuban regime until all political prisoners and freed ... until free and internationally recognised elections are held."
Trump set to change US-Cuba policy
Trump's revised approach, which will be enshrined in a new presidential directive, calls for stricter enforcement of a longtime ban on Americans going to Cuba as tourists.
The new policy is also expected to ban most US business deals with the Armed Forces Business Enterprises Group (GAESA), a sprawling conglomerate run by General Luis Alberto Rodriguez Lopez-Callejas, son-in-law of Cuban President Raul Castro.
GAESA operates dozens of hotels, tour buses, restaurants and other facilities.
Yet, parts of Obama's diplomatic breakthrough in December 2014 are expected to remain intact, including the reopened US embassy in Cuba's capital, Havana, and the restoration of relations between Cold War-era foes.
Views from Miami, Havana
Al Jazeera's Andy Gallacher, reporting from Miami, said Trump was seeking to make good on a campaign promise to conservative Cuban-Americans that will stop the flow of money from US businesses to the Cuban military.
"Essentially, Trump is looking to stop funding for the Cuban government, the Castros and the military, while encouraging young entrepreneurs to make their own way," he said.
"Trump wants to challenge the Castro leadership and improve the country's human rights record. Among, the people calling for change in Miami are local congressmen and they're very vocal people. They won't be happy until they see free and fair elections in Cuba."
READ MORE: Cuban Americans warily await Trump's policy rethink
Al Jazeera's Lucia Newman, reporting from Havana, said Cubans had been eagerly waiting Trump's speech.
"Relations between Cuba and the US have gone up and down during the last half century and while their have been small steps to improve them, the people have only seen them roll back rather swiftly," she said.
"Around 60 percent of the economy is controlled by the military ... people are bracing themselves for the worst.
"We're hearing of a lot of cancellations on [the online accommodation service] Airbnb, and as many as 25 students that were attending an exchange programme have cancelled.
"Last month, the Cuban government said it would legalise small- and medium-sized private businesses, we don't know exactly what that will entail right now, but that could significantly expand private enterprise and is a decision they probably made in anticipation for Trump."
Engage Cuba, a group lobbying for an end to the embargo, estimates that 10,000 US jobs in aviation and the cruise business already depend on Cuba.
Some 285,000 people visited the Caribbean country in 2016, up 74 percent over 2015, with Americans the third biggest group after Canadians and Cuban expats.
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