Qatar and Bahrain will resume their diplomatic ties, both Bahrain news agency (BNA) and the Qatari foreign ministry said Wednesday.
The move comes over two years after an Arab boycott of Qatar was lifted.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt in January 2021 ended a 3-1/2-year embargo of Qatar but all but Bahrain restored travel and trade links in 2021.
On Wednesday, the Bahraini-Qatari Follow-up Committee held its second meeting at the headquarters of the GCC General Secretariat in the Saudi capital where the decision was made, the two countries said in separate statements.
In January, Bahrain's crown prince spoke with Qatar's emir by telephone, in a sign the two Gulf states were moving towards repairing relations.
The row that led the quartet to cut all ties with Qatar in 2017 centered around its support for Islamist movements deemed a threat by Arab neighbors and its ties with Shi'ite Muslim power Iran and Turkey.
The four states also had their own disagreements with Qatar.
Regional heavyweight Saudi Arabia has led efforts to rebuild ties with Qatar and, along with Egypt, re-established diplomatic relations.
Bahrain, a Sunni Muslim-ruled monarchy with a restive Shi'ite population, has deep unease over Qatar's relations with Iran. Bahrain also has territorial disputes with Qatar.
Recent restoration of diplomatic ties between Saudi Arabia and Iran signaled a new policy by the leader of Persian Gulf Sunni Arab states for closer regional ties.