Burma has agreed to forego the 2006 chairmanship of a key Asian regional forum, according to a group statement.
The climb-down came at the opening of Asean's meeting in Laos
The country's junta is under pressure to institute democratic reforms before taking the helm of the Association of South East Asian Nations (Asean).
Some Asean members had feared that Rangoon taking the chair next could damage the group's standing.
Asean foreign ministers, meeting in Laos, said Rangoon would take over the chairmanship once ready to do so.
"Myanmar [Burma] has to focus on the national reconciliation process, and has requested their Asean colleagues to postpone its chairmanship for another occasion," said Lao Foreign Minister Somsavat Lengsavat.
"We agreed that once Myanmar is ready to take its turn to be the Asean chair, it can do so," Asean foreign ministers said in a joint statement.
The BBC's correspondent at the meeting in Vientiane, Kylie Morris, says the European Union and the United States had both warned they would probably boycott Asean meetings if Burma were to take the chair.
American and European officials have frequently called for Rangoon's military government to release hundreds of political prisoners, including opposition leader Aung San Suu Kyi, as well as implement democratic reforms.
Washington and the EU welcomed Tuesday's announcement.
But State Department spokesman Sean McCormack added that Burma "remains far from the goal of peaceful transition to democracy".
But there have been divisions over the issue within the 10-member Asean body itself.
Burma's loyal supporters are mainly the newer members of the group - Laos, Cambodia and Vietnam.
But in the end it was the view shared by the Philippines, Malaysia and Singapore that prevailed, says our correspondent.
The decision to defer Rangoon's chairmanship will be seen as a victory for critics of the regime, she says.
They had urged Asean states to break with their stance of non-interference and send a message to Rangoon that it must begin the real work of democratic reform.
But the agreement in Laos does gives Burma the right to campaign again for the chairmanship when it can prove that it is ready.
The chairmanship of Asean is alphabetically rotated, and the Philippines will take the place of Burma, which is listed under the name of Myanmar.
Also on the agenda
The delegates at this year's week-long summit - from Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam - are due to discuss a variety of issues including terrorism and agreements on sharing intelligence.
They are also expected to sign a pact calling for improved emergency preparedness following last year's tsunami.
Indonesia and Thailand - both Asean members - were among the nations worst hit by the 26 December disaster.
Delegates from the 10 Asean nations will be joined by representatives from other countries during some of the discussions.
One of the highlights is expected to be Australia's signing of a non-aggression deal with the group.