Singapore Prime Minister Lee Hsien Loong will visit Malaysia in May for a meeting with his Malaysian counterpart in a sign bilateral ties are maturing, Foreign Minister George Yeo said on Monday.

"Prime Minister Lee Hsien Loong will visit Malaysia with a delegation of cabinet ministers for a retreat with Prime Minister Abdullah Badawi and his colleagues," Yeo told the Singaporean parliament.

"This will be the first retreat between our leaders," Yeo said. "On the whole, our relations with Malaysia are good and getting better... I welcome this new phase in our relationship."

Malaysia and Singapore have strong economic ties but the two nations have squabbled periodically since Singapore was ejected from the new Malaysian federation in 1965 due to race politics.

Among the outstanding issues are the price of water that Malaysia supplies to resource-scarce Singapore, the future of Malaysian-owned railway land inside Singapore and rival claims to a rocky islet.