* Move eliminates need for citizens to have exit visa
* Restrictions have been imposed since 1961
* Latest reform under President Raul Castro
By Jeff Franks
HAVANA, Oct 16 (Reuters) - Cuba will scrap much-reviled travel restrictions starting in January, making it easier for its citizens to leave the communist-ruled island in the first major reform to its migration policies in half a century.
The changes reverse tough restrictions imposed in 1961 when the government tried to put the brakes on a mass migration of people fleeing after the 1959 revolution that put Fidel Castro in power.
The government said on Tuesday it would lift requirements to obtain an exit visa permitting departure from Cuba and a letter of invitation from someone in the destination country, putting an end to a process that Cubans complained was too time consuming and expensive, with no guarantee of final approval.
Now, most Cubans will only have to show their passports, national identity cards and, if needed, a visa from the country they will visit to go abroad, deputy immigration chief Colonel Lamberto Fraga told reporters.
In theory, the changes should make it easier for Cubans not only to travel but to work abroad and return home when they want.
But Cubans will still need to obtain visas from most countries, which may not be easy because of fears that those who were granted tourist visas might not want to return to the island.
"For most, the key bottleneck will now be getting an entry visa from the target country," said Bert Hoffmann, a Cuba expert at the German Institute of Global and Area Studies in Hamburg.
The changes, which Fraga called "profound," are the latest reforms under President Raul Castro, who has modestly liberalized Cuba's Soviet-style economy, but mostly eschewed the notion of political reform.
The new law also extends the time limit of visas for foreigners wishing to live in Cuba. "They want people to come and live in Cuba, and invest in the country," said Antonio Zamora, a Cuban-American lawyer in Miami who travels frequently to the island to study Cuba's legal system.
But the law maintains restrictions on Cuban exiles who it says might seek to return to the island to "engage in hostile political actions."
An editorial in the Communist Party newspaper Granma blamed the island's longtime policy on the United States, which it said had long tried to sabotage Cuba in various ways, including the enticement of doctors and other professionals away from the island.
Over the past half century, thousands of Cubans have died trying to cross the treacherous Florida Straits in flimsy boats and homemade rafts, while hundreds of thousands more have completed the journey, many of them in mass migrations in 1965, 1980 and 1994.
The United States now accepts about 20,000 Cubans annually via legal immigration, as well as family members seeking reunification, and also takes in those who manage to reach U.S. shores without being intercepted.
Under the "wet foot, dry foot" policy, it turns back Cubans picked up at sea. Almost 1,300 Cubans were repatriated to Cuba in the past 12 months after failing to make it to U.S. soil.
"We obviously welcome any reforms that will allow Cubans to depart from and return to their country freely," said U.S. State Department spokeswoman Victoria Nuland. "We are analyzing, obviously, all of the details and any implications it may have for our processing" of Cubans seeking to travel to the United States.
The new travel measures, set to take effect on Jan. 14, extend to 24 months, from the current 11, the amount of time Cubans can be out of the country without losing rights and property, and they can seek an extension of up to 24 months more, the government said.
Cubans welcomed the changes, which Castro promised last year and then delayed because he said there were issues and details to be worked out.
"There have been many expectations for many years about a new travel law. It's a big step forward that will save us money and simplify the process," said Rafael Pena, an office worker, as he headed to his job in Havana.
"At last, our government is not going to treat us like children," said Israel Gutierrez, a college student, while waiting to board a bus.
One woman said she hoped finally to take her daughter to Disney World in Florida.
In Miami, center of the Cuban exile community in the United States, fashion designer Vicente Chinor said increased family visits from Cuba would be "fantastic."
"There are people here who have families (on the island). They live here alone, missing their children, their parents, their siblings."
Prominent Havana-based dissident blogger Yoani Sanchez, who complains that authorities have denied her travel permits 20 times, said on Twitter she would test the lifting of restrictions as soon as they took effect.
"My friends tell me not to get my hopes up about the new immigration law," Sanchez said. "They say I'm on the 'black list' but I'm still going to give it a try."
It was not clear if dissidents, derided by the government as "mercenaries" in the pay of the United States and other enemies, would be allowed to travel under the new rules.
Fraga said restrictions would still be in place for certain groups that Cuba does not want to lose, including doctors, members of the military and athletes, and for reasons of national defense or security.
Cuba experts praised the changes as a big step forward.
"Like earlier decisions legalizing the personal sales of homes and cars, this is another step in the direction of loosening restrictions and opening up Cuban society," said Sarah Stephens, executive director of the Center for Democracy in the Americas, a Washington group opposed to the U.S. embargo on Cuba.
The changes also mean that "Cuba now gives its citizens more freedom to travel to the U.S. than the U.S. gives its citizens to travel to Cuba," said John McAuliff of the Fund for Reconciliation and Development, which advocates better U.S.-Cuba relations.
Under its long-standing trade embargo against Cuba, the United States allows Cuban-Americans free travel to their homeland, but requires most other Americans to get a license from the U.S. government to visit the island.