About 800 troops from Cambodia and 400 from Thailand have been facing off in the area for a month.
On Thursday, Genernal Neang Phat, the Cambodian deputy defense minister, said the two countries agreed to a gradual redeployment of troops from the area ahead of talks between their foreign ministers on territorial disputes next Monday in Thailand.
Samak Sundaravej, the Thai prime minister, had backed Cambodia's World Heritage site bid, sparking demonstrations by anti-government protesters who claimed it would undermine Thailand's claim to the surrounding area.
The protests left Samak politically vulnerable, and he sent troops to occupy another disputed temple compound adjacent to Preah Vihear to appease his nationalist critics.
Cambodia responded with its own troop deployment.
The border dispute has not been resolved despite two rounds of talks since last month, with the countries referring to two different maps.
Cambodia uses a French colonial map demarcating the border, which Thailand says favours Cambodia.
Thailand relies on a map drawn up later with American technical assistance.