Saudi Crown Prince Mohammed bin Salman and Thailand's Prime Minister Prayuth Chan-ocha met on Friday in Bangkok and signed agreements to expand diplomatic relations that were restored this year after more than three decades.
The two leaders presided over the signing of five agreements pledging to increase trade and investment between their countries, as well as promoting tourism and deepening co-operation in energy.
Thailand hopes its improving relationship with Saudi Arabia can give it an economic boost.
Mr Chan-ocha held talks with the Prince Mohammed on the sidelines of the Asia-Pacific Economic Co-operation (Apec) summit in Bangkok. Saudi Arabia was invited as a guest of the Apec host country.
"Co-operation in trade, investment and labour is already underway," government spokeswoman Ratchada Thanadirek said before the meetings.
The two countries restored full diplomatic ties in January when Mr Chan-ocha visited Saudi Arabia at the invitation of the Prince Mohammed.
Saudi Arabia downgraded diplomatic relations in 1989 following the "blue diamond affair".
A Thai cleaner working for King Fahd's eldest son, Prince Faisal, stole jewels from the royal in 1989, including a 50-carat blue diamond, which was never returned.
The incident escalated when three Saudi diplomats were shot dead in Bangkok and the kingdom accused Thai authorities of returning fake gems.
But in January, the two countries upgraded their levels of diplomatic representation from charge d’affairs to the ambassador. Both embassies opened on Friday and the new ambassadors were announced.
"The restoration of ties has mutual benefits for both countries," Prince Mohammed said.
Investment, infrastructure and public health were important areas for the countries, he said.
"Overcoming the blue diamond issue is a net positive for both countries," said Ben Kiatkwankul, a partner at government affairs advisory Maverick Consulting Group.
Saudi Crown Prince Mohammed bin Salman attends Apec summit in Thailand
Saudi Arabia is seeking to diversify its economy away from oil into industries including food and agriculture, which makes Thailand a good partner, he said.
Thailand stands to benefit from energy-related projects and medical tourism.
Since January, exchanges between the two countries have included an agreement between state-owned energy companies Saudi Aramco and Thailand's PTT for co-operation in carbon capture and crude oil sourcing.
In October, Thailand hosted the Saudi-backed LIV Golf Invitational.
Saudi Investment Minister Khalid Al Falih this month attended a business forum in Bangkok meeting agriculture companies including CP Foods.
