RANGOON—Burma has agreed to allow observers from Southeast Asian countries to monitor April elections that are viewed as crucial for gauging the nation's much-heralded democratic reforms, the  regional bloc said on Tuesday.

Allowing outside monitors is a major step for the long-isolated country, which rejected international bids to observe its last two elections, in 2010 and 1990.

Burma's decision was announced by the 10-member Association of Southeast Asian Nations (Asean).

The bloc's statement said Burma invited Asean to send five observers and 18 parliamentarians—two from each neighboring country—to witness the vote, along with media representatives.

After nearly half-a-century of iron-fisted military rule in Burma, also known as Myanmar, a nominally civilian government took office last March. The new government has surprised even some of the country's toughest critics by releasing hundreds of political prisoners, increasing media freedoms and allowing opposition leader Aung San Suu Kyi, the Nobel Peace laureate and longtime political prisoner, to run for a seat in Parliament.

The April by-election is being held to fill 48 parliamentary seats vacated by lawmakers who were appointed to the cabinet and other posts.

“We welcome the good news that observers will be allowed to monitor the by-election,” said Nyan Win, the spokesman of Suu Kyi's National League for Democracy opposition party. It will “help ensure a free and fair election.”

The US, European Union and United Nations have called the polls “a key test” of the government's commitment to reforms.

American officials have singled out the April polls as a measure of whether the West will lift sanctions imposed on Myanmar during the military junta's rule.

The Myanmar government made no official comment about welcoming election monitors. Tuesday's evening news on state-run television, where official announcements are generally made, did not mention the development. The top story was about President Thein Sein's official visits to Vietnam, Cambodia and Laos, all Asean countries.

Asean also includes Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.