The UAE and Israel have established a "green corridor” allowing people to travel freely between the two countries.
Officials agreed to mutually recognise their Covid-19 vaccination certificates.
New cases of the coronavirus have fallen in Israel and the UAE in recent weeks following the introduction of booster doses in both countries.
In Israel, which has offered everyone over the age of 12 a booster shot, there were 543 new cases of Covid-19 on Sunday.
In the UAE — which has offered a booster to everyone who received a second dose of the Sinopharm vaccine more than six months ago — there were only 94 new cases on Sunday.
Both Israel and Abu Dhabi operate an app-based green pass system, which requires people to be vaccinated to visit many public places.
The agreement was signed virtually on Sunday by Abdulrahman Al Owais, Minister of Health and Prevention, and his Israel counterpart, Nitzan Horowitz, in the presence of senior officials from both sides.
Mr Al Owais said that the agreement was part of wider co-operation between the countries in health initiatives.
"I was happy to sign this morning with the health minister of the United Arab Emirates, an agreement for a green passage between the two countries," Mr Horowitz tweeted.
"The agreement allows free movement between Israel and the Emirates and mutual recognition of vaccination certificates and green passports, without isolation or bureaucracy," he said.
Israel's success in tackling the Delta Covid-19 wave has prompted some experts to suggest booster doses should be administered more widely than just vulnerable groups.