Malaysia and its tiny oil-rich neighbor Brunei on Wednesday agreed to allow frequent travellers from both sides to cross borders without the need for passports, state media reported.

Instead citizens of both countries can use their respective state-issued identity cards as "frequent traveller cards" when entering, Bernama news agency said.

The agreement was reached during talks between Brunei's Sultan Hassanal Bolkiah and Malaysian Prime Minister Abdullah Ahmad Badawi, who was visiting Brunei.

Malaysia is seeking to ink a similar agreement with Singapore and Thailand in the future, a newspaper report said.