"This is obviously an historic meeting," Obama said as the two leaders sat just feet apart.
The two men sat down for in-depth talks on the sidelines of the Summit of the Americas here, a historic moment between two countries trying to repair relations after nearly six decades of mistrust and tension.
"It was time for us to try something new," the president added as he discussed the U.S. policy towards Cuba for the past 50 years. "We are now in a position to move on a path toward the future."
Obama and Castro both said they have "agreed to disagree" on certain issues but are committed to maintaining a strong relationship between their two nations.
"No one should entertain illusions. It is true that we have many differences," Castro said "But we are willing to make progress in the way the president described."
"The Cold War's been over for a long time and I'm not interested in having battles that frankly started before I was born," Obama said.
"Over time it is possible for us to turn the page and develop a new relationship between our two countries," he said.
Castro, who was the first Cuban president ever invited to the Summit of the Americas, expressed his admiration for President Obama, adding that his predecessors are to blame for isolating Cuba.
"There were 10 presidents before him -- who all of them have some sort of debt to us except President Obama," Castro said. "I admire him and his life and I think his behavior has a lot to do with his humble background."
The highly anticipated meeting between Obama and Castro is the latest development in normalizing relations between their countries. The two men were expected to discuss the possibility of reopening embassies in each of their countries, lifting the embargo, and removing Cuba from the State Sponsors of Terrorism list.
The State Department has recommended that Cuba be taken off the list. President Obama is reviewing their recommendation and is expected to announce his own recommendation soon.
Obama and Castro encountered each other at the summit's inauguration events Friday evening, briefly greeting each other and engaging in an historic handshake.
Before President Obama departed on his trip to Jamaica on Wednesday, he called Castro to "review the status" and discuss the steps being taken to achieve normalization between the U.S. and Cuba.
Secretary of State John Kerry and Cuban Foreign Minister Bruno Rodriguez held an historic meeting of their own Thursday evening -- the first time the nation's top diplomats spoke in person since the Cuban revolution.