Malaysian Prime Minister Abdullah Ahmad Badawi and Indonesian President Susilo Bambang Yudhoyono have separately confirmed talks would be held at the foreign ministerial level, following a telephone conversation.
"Solving the problem should be done without any confrontation, especially armed confrontation," Susilo told an audience of government officials, local lawmakers and residents on Borneo island on Monday.
"We are positive of achieving good results from diplomatic discussions," Abdullah told his staff at a regular morning assembly.
Malaysian Foreign Minister Syed Hamid Albar was scheduled to leave for a three-day visit to Jakarta on Wednesday for talks with his Indonesian counterpart Hassan Wirajuda to discuss the overlapping claims in the Sulawesi Sea.
The disputed area lies near the land border between Indonesia's East Kalimantan province and Malaysia's Saba state.
The tension between the two countries escalated when Indonesia sent fighter jets and more warships to waters it is disputing with Malaysia in response to counter Kuala Lumpur's awarding of oil exploration rights in the area believed to be rich in undersea oil.
Demonstrators protested outside
Malaysia's embassy in Jakarta
This adds to already tense ties between the two countries caused by a Malaysian crackdown on illegal workers, most of them from Indonesia.
Jakarta said it had sent three more warships to join four others already there, as well as four F-16 fighter jets to the area off the east coast of the island of Borneo.
It said the move was part of security measures before the Indonesian president's visit to the disputed area.
Jakarta has protested a move by Malaysia's state oil company Petronas to grant energy giant Shell a concession in the area on 16 February, saying that it encroached into Indonesian maritime territory.
Kuala Lumpur has maintained the disputed area lies within its maritime borders, and has accused Indonesia of trespassing on its territory by sending a navy patrol ship to the oilfield.