According to AFP
, a Myanmar official, who did not want to be named, said the observers will be like a joint team from the invited countries.
"It will be up to the countries whether they send people from overseas or inside Myanmar," he said, without specifying how many observers would be allowed for the April 1 polls.
The elections, which will see the participation of democracy leader Aung San Suu Kyi, will be crucial to the eventual restoration of diplomatic relations with several western democratic countries.
A free and credible elections could likewise lead to the lifting of economic sanctions by the US and other European countries.
The US embassy in Myanmar welcomed the move but cautioned about irregularities in the conduct of the elections.
"This is encouraging to see that they have taken this step. Clearly we feel the elections are important for this country's reform process," said embassy spokesman Mike Quinlan.
"Having observers is one step, but to have a free and fair election there really should be no violence and intimidation as well," he said.
Less than 50 seats are being contested in the April 1 by-elections with democracy leader Suu Kyi running for the first time
after her party, the National League for democracy (NLD) won a landslide victory in 1990. Suu Kyi was not allowed to take power as Prime Minister but was instead put under house arrest for about 15 of the past 20 years.
The military-backed civilian government which took power after the March 2010 elections, has surprised many western countries with its reformist actions which include the relaxation on media, labor reforms, release of political prisoners and liberalized rules on freedom of assembly.
is expected to win handily in the election and become a member of parliament. But even if all the opposition candidates win, they will still constitute the minority in the 224-seat National Assembly.