But if Sudan did not act, "then there will be increased pressure imposed by the US and the international community".
The UN estimates that as many as 300,000 people have died and more than two million have been driven from their homes in Darfur since 2003, when mostly non-Arab fighters took up arms against the Khartoum government.
Hillary Clinton, the US secretary of state, said genocide was taking place in the region and that Washington's focus would be on protecting civilians, helping displaced persons and ensuring that fighters were disarmed.
Obama's terms
In his statement on Monday, Obama said: "Sudan is now poised to fall further into chaos if swift action is not taken.
"First, we must seek a definitive end to conflict, gross human-rights abuses and genocide in Darfur.
"Second, the Comprehensive Peace Agreement between the North and South in Sudan must be implemented to create the possibility of long-term peace."
Clinton said the new Obama policy toward Sudan would include "a menu of incentives and disincentives" but refused to specify what they might be.
Scott Gration, Obama's new special envoy, has argued that Sudan's many problems can only be resolved with the co-operation of the government of Omar Hassan al-Bashir, the country's president.
Arrest warrant
In March, the International Criminal Court in The Hague issued an arrest warrant for al-Bashir for war crimes.
The administration of George Bush, the former US president, relied on sanctions as its key leverage against al-Bashir's government.
Clinton said Obama's administration was also committed to sanctions as a tool to put pressure on Khartoum.
Some human-rights groups, frustrated by the world's failure to end the humanitarian crisis in the region, have expressed disappointment at Washington's failure to take the tough line on Sudan that Obama supported during his election campaign.
Mark Hanis, president of the Genocide Intervention Network, told Al Jazeera: "We have been very frustrated with the first ten months of this administration's response to Sudan, and we see this as a great opportunity to hold the administration accountable.
"Obama can no longer blame the previous [US] administration for doing nothing on Sudan.
"All press statements from the White House today call it a genocide. But the bigger issue is that it does not matter whether or not it is called a genocide - there are mass atrocities happening in western Sudan, and what we are fearing is that there will be a relapse in southern Sudan."
The US, UN and aid organisations say hundreds of thousands of people have died during the conflict. Khartoum puts the death toll at closer to 10,000.