The money will be spent surveying the Asian nation for some 80 million unexploded cluster bombs dropped during a secret US bombing campaign as part of the Vietnam War 40 years ago.
The move was welcomed by Laos President Bounnhang Vorachit as a way of strengthening mutual trust after the devastating campaign, that still maims or kills 50 people who stumble upon unexploded mines each year.
Efforts to find the bombs will be aided the Pentagon, who will supply records of where they were dropped.
Between 1964 and 1973, US warplanes rained more than two million tons of bombs on Laotian villages and countryside to try and cut off the Vietnamese army’s supply trail.
To this day, less than 1% of the bombs have been cleared, according to US-based non-government organization Legacies of War.
US funding for clearance of unexploded ordnance and victims’ assistance has steadily grown since 2010, when Congress mandated that the US government give at least $5 million for unexploded ordnance removal.
This year, Congress allotted $19.5 million, but now, for the first time, an American president has publicly recognized that the US has a responsibility to do more.