Saudi Arabia will fund the construction of a $1 billion sports city in Iraq as well as open four consulates, officials said after the second session of a bilateral co-operation council on Wednesday night.
Riyadh has been courting Baghdad in efforts to boost economic and trade ties and fend off Tehran’s influence in the region.
The announcement followed the arrival in Baghdad of a delegation led by Saudi Trade Minister Majid Al Kassabi for the second meeting of the Saudi-Iraqi Co-ordination Council.
Iraq's Oil Minister, Thamer Al Ghadhban, said the sports city would be located in Baghdad.
The Iraqi project follows Saudi Arabia launching its own large scale entertainment projects worth Dh86 billion last month.
Mr Al Kassabi said that Iraq presented 186 investment opportunities to the kingdom, and declared that a "new chapter" had opened between Riyadh and Baghdad.
"There is a will for implementation, which is considered to be a significant development. We will review the opportunities presented to us and will respond accordingly," the Saudi minister said during a press conference with Mr Al Ghadhban.
"Our meetings were transparent, genuine, clear and we hope this will deepen our ties," he said.
"We have emerged from the state of planning to the state of implementation and determining the work plan for the projects," he said.
“There are 13 agreements which are ready to be signed.”
Mr Al Kassabi said Saudi companies such as Aramco, Ma'aden and Aquapower had put forward investment proposals. In addition, private sector companies had proposed creating a free trade area at the Arar border crossing between Saudi Arabia and Iraq. He said the crossing was expected to reopen within six months.
On the diplomatic side, Mr Al Kassabi said the kingdom opened a consulate in Baghdad on Thursday to issue visas to Iraqis, as well as three others around the country.
Baghdad and Riyadh's rapprochement goes back to 2015, when Saudi Arabia reopened its embassy in Baghdad after 25 years.
Mr Al Kassabi’s delegation is made up of 100 officials and several ministers including Culture Minister Prince Badr bin Abdullah, Environment Minister Abdul Rahman Al Fadhil and Minister of State for Arab Gulf Affairs Thamer Al Sabhan. Their visit is expected to last three days.
The Saudi officials held talks with Iraqi Prime Minister Adel Abdul Mahdi on Wednesday and met President Barham Salih on Thursday.
Mr Salih praised Saudi Arabia's efforts to assist Iraq.
“Saudi and Iraq have historic ties that are deeply rooted and are strengthened in line with the aspirations of its leaders and citizens,” the president said.
Mr Salih said that after the defeat of ISIS, Iraq has presented itself as a platform for regional and international investment.
“This is a means to solidify relations between Iraq and the rest of the world,” he said.
Saudi officials were also expected to meet Parliament Speaker Mohammed Al Halbousi on Thursday.
This was Mr Al Kassabi's second trip to Baghdad in the space of three weeks.
Prior to the visit, the Saudi Ambassador to Iraq, Abdulaziz Al Shammari, said the new agreements were needed to rebuild ties after the decades-long freeze in relations.
Mr Al Shammari noted that Saudi Arabia pledged $1.5 billion at the Iraqi Reconstruction Conference in Kuwait last year to support "developmental projects to stand by the Iraqi people".
Iraq is also seeking economic benefits from closer ties with Saudi Arabia and other Gulf states.
The reopening of the Arar border crossing is one several projects between Riyadh and Baghdad. Construction of a border compound on the frontier started last month.
The project is being funded and implemented by Masco, the Saudi construction company responsible for the railway project linking Makkah to Madinah.