The countries have engaged in occasionally deadly clashes over a disputed area near a 900-year-old temple, though tensions have eased since an election victory by allies of ousted ex-leader Thaksin Shinawatra last month.
“Now is a good opportunity to announce a new era of cooperation between the Cambodian government and the Thai government led by the Puea Thai Party,” Hun Sen said in a speech in the Cambodian capital.
“I think everything that happened in the past can be considered as the last nightmare of the relationship between Cambodia and Thailand. From now on, ties will be better,” he vowed.
He added that Cambodia was “looking at all means” to improve the border situation and that he suspected the dispute would no longer be a major issue of concern for the 10-member Association of Southeast Nations (ASEAN).
Cambodia is due to take over as ASEAN chair from Indonesia in 2012.
Phnom Penh has made no secret of its delight with the new Thai government — especially Prime Minister Yingluck Shinawatra, the sister of Thaksin, whom Hun Sen has described as an “eternal friend”.
Under previous Thai premier Abhisit Vejjajiva the border spat twice escalated into heavy arms clashes this year, prompting Phnom Penh to take the dispute to the United Nation’s highest court.
The Hague-based International Court of Justice in July asked both nations to withdraw military personnel from around the Preah Vihear temple complex.
Neither side has pulled out yet, though the border situation has been calm and Hun Sen said Cambodia had started to reduce troop numbers from other areas near the temple.
Although Thailand does not dispute Cambodia’s ownership of Preah Vihear, both Phnom Penh and Bangkok claim a 4.6-square-kilometre (1.8-square-mile) area of adjacent land.
In February 10 people were killed in fighting at the temple site and fresh clashes broke out further west in April, leaving 18 dead.