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The President lifted the limitation put in place by the Bush administration in 2001. Since then, federal funding has been available to only 21 stem cell lines. Monday's order also allows for collaboration with federally-funded labs.
Scientists at CIRM, the California Institute for Regenerative Medicine, watched in anticipation Monday morning as President Obama made the announcement. The agency was created by California voters to help pay for embryonic stem cell research during the Bush years.
CIRM directors believe the state is now in a unique position to take advantage of increased federal spending that may follow the loosening of research guidelines.
"We'll be ready in partnership to work with them. California is leading this in the world," says CIRM President Dr. Alan Trounson.
At Bay Area research centers like the Gladstone Institute at UCSF, scientists will now be able to share equipment and resources with federally-funded colleagues, something that used to be against the law.
It is a change that could help advance projects like one in which researchers coaxed stem cells into becoming clusters of heart cells, already beating in time.
Director Depak Srivastava believes practical therapies could follow in a few short years.
"The areas that are likely to benefit first if at all, are things like heart disease," he explained.
It is an all too immediate hope for Kristin Constantine, who could only show ABC7 a cell phone picture of her five-month old son Johnathan. Monday morning surgeons at UCSF were busy trying to repair his congenitally-deformed heart.
She says Johnathan's condition will require future treatments which doctors have told her might be aided by stem cell therapy.
"He's almost died three times so it's been quite the road for us. But, I'm hoping that stem cell research would help other families," she said.
Despite whatever promise future therapies might offer, critics of the President's action Monday argue that the underlying issue is still the destruction of embryos to harvest stem cells, whether they are provided by fertility clinics or not.
UCSF philosophy professor Raymond Denehey says, "Given that it's a human being from the moment of conception, you're talking about the killing of innocent human beings for the sake of some purpose."
But, at labs and universities researchers believe Mr. Obama's move signals a shift toward a stronger science-based policy for federal research.
Srivastava says, "The key is we let science move forward as aggressively as possible."
Officials at the National Institutes of Health are creating guidelines on how to hand out funding and manage ethical concerns. The average NIH stem cell grant is exected to be $1.5 million spread out over five years.
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