The U.S. Federal Reserve has given the go-ahead for state-owned Chinese banks to enter the U.S. banking market.

The U.S. central bank on Wednesday approved an application by China's biggest bank – the Industrial and Commercial Bank of China – to buy an 80 percent stake in the U.S. branch of the Bank of East Asia. It is the first time a Chinese state-controlled company has been approved to acquire a U.S. bank.

The landmark step comes days after U.S. and Chinese officials held high-level financial talks in Beijing. U.S. officials said during the talks that China has made progress on a number of issues, including taking steps toward a more open and market-oriented financial system.

In making its decision, the Federal Reserve said it had concluded that ICBC, which is 70 percent owned by the Chinese government, will be suffiently supervised and had the resources to adequately support the U.S. branches.

The Federal Reserve on Wednesday also allowed two other Chinese financial institutions to enter the U.S. market, allowing the Bank of China to open a branch in Chicago and the Agricultrual Bank of China to set up a branch in New York.