The European Union said on Thursday it will suspend its sanctions on Belarus for four months from Saturday, including those on authoritarian President Alexander Lukashenko, making good on its promise to reward a perceived opening up to Europe.

Lukashenko's pardoning of jailed political prisoners and a perceived lack of repression following the re-election this month of a man whom the United States once said runs Europe's last "dictatorship", had influenced the EU's approach, diplomats said.

In a statement confirming the decision, the European Union noted "the context of improving EU-Belarus relations".

EU governments have "suspended for four months the asset freeze and travel ban applying to 170 individuals and the asset freeze applying to three entities in Belarus," said the Council of the European Union, which is akin to an EU senate.

While Belarus, a close Russian ally, is still far short of carrying out democratic reforms, the EU's strategy marks a new approach to engage rather than isolate its neighbours in central and eastern Europe.

The move to suspend the sanctions will be published in the EU's Official Journal on Friday, taking effect on Saturday, as first reported by Reuters earlier this month.

An arms embargo will remain and four members of Lukashenko's security services, suspected of being behind the disappearances of political opponents, will remain under sanctions.

The situation will be reviewed at the end of February and could be re-imposed if the EU sees a deterioration in human rights, the rule of law and press freedoms.

But for now, Belarussian companies targeted by sanctions will be eligible for financing from the European Investment Bank. Ending other curbs that block Belarus from European capital markets, export credit insurance or EU technical assistance mean Russia is no longer the only source of financing for Belarus.

EU officials acknowledge that their policy to promote democracy in the bloc's six former Soviet bloc neighbours has had only limited success.

The EU feels it needs a new approach, in part to win partners and counter what it sees as a newly aggressive Russia which annexed Ukraine's Crimea peninsula in 2014. Lukashenko, in power for 21 years, also appears keen to balance his alliances.

He is also wanting to boost the economy, which is exposed to the recession in Russia and shrank by 4 percent in the January-July period.

In a rare concession to protests, Lukashenko has also questioned whether Russia should be building a military air base in Belarus.