Amid an international effort to quell the conflict, the Thai and Cambodian leaders held talks in Malaysia on Monday hosted by its Prime Minister Anwar Ibrahim, the current chair of the ASEAN regional bloc, where both sides agreed to halt hostilities and resume direct communications.
Anwar said when opening a news conference alongside the Thai and Cambodian leaders that there would be "an immediate and unconditional ceasefire with effect from midnight tonight. This is final."
The Southeast Asian neighbours accuse each other of starting the fighting last week before escalating it with heavy artillery bombardment and Thai air strikes along their 800km land border.
Anwar had proposed ceasefire talks soon after a long-running border dispute erupted into conflict on Thursday, and China and the United States also offered to assist in negotiations.
US President Donald Trump called both leaders at the weekend urging them to settle their differences, warning he would not conclude trade deals with them unless they ended the fighting.
The tension between Thailand and Cambodia has intensified since the killing of a Cambodian soldier during a brief skirmish late in May.
Both sides reinforced border troops amid a full-blown diplomatic crisis that brought Thailand's fragile coalition government to the brink of collapse.
"Today we have a very good meeting and very good results ... that hope to stop immediately the fighting that has caused many lives lost, injuries and also caused displacement of people," Hun Manet said, expressing appreciation to Trump and to China for its efforts in taking part in the process.
"We hope that the solutions that Prime Minister Anwar just announced will set a condition for moving forward for our bilateral discussion to return to normalcy of the relationship, and as a foundation for future de-escalation of forces."
Acting Thai Prime Minister Phumtham Wechayachai, who had earlier expressed doubts about Cambodia's sincerity ahead of the negotiations in Malaysia, said Thailand had agreed to ceasefire that would "be carried out successfully in good faith by both sides".
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