Both sides have pledged to resolve the dispute "bilaterally and peacefully".
Hor Namhong, the Cambodian foreign minister, said they had "agreed to ask our governments to redeploy the troops" with details to be discussed later.
"We cannot resolve this problem at one meeting. It will require more meetings," he said. "We will exercise maximum restraint and avoid the use of armed force."
"The redeployment will only take place once the Thai government approves," Tej Bunnag, Thailand's foreign minister, said.
|The two foreign ministers said they would hold further talks to ease the row [Reuters]
Neither side has set any firm deadline for the troop withdrawal from area around the temple, or a date for the next meeting.
During Monday's talks the two countries also proposed a series of steps to end the conflict including a scheme to remove landmines that litter the area so that the border can be properly demarcated.
Cambodian and Thai officials said the meeting was the first step in what is likely to be protracted negotiations to end a dispute that has simmered for decades.
A first round of talks in Bangkok failed last week after Thai and Cambodian defence ministers could not agree on which maps to use to demarcate the border.
Cambodia had sought help from the United Nations but suspended its request pending the outcome of talks with Thailand.
The current conflict focuses on an area about 5 sq km of scrubland surrounding the 11th century temple which was recently awarded World Heritage listing by Unesco, the UN cultural organisation.