Eighteen Cambodian soldiers have received a hero's welcome home after Thailand released them as part of a truce deal that ended weeks of deadly fighting along their contested frontier.

A decades-old border dispute between the South-East Asian neighbours erupted into military clashes several times this year, with the latest round of fighting in December killing dozens of people and displacing more than a million others.

Some of the 18 soldiers, who were captured by Thailand and held for five months as prisoners of war, smiled, waved and gestured with their palms pressed together to cheering crowds through bus windows in the border province of Pailin, and later in Phnom Penh.

Hundreds of well-wishers lined the streets of the capital, hollering and waving national flags, as a caravan of mini-buses shuttled the returned men and teary-eyed relatives through the city, video from Cambodian state television showed.

One woman in the crowd, Im Sivorn, 53, told AFP their homecoming was like a gift for the new year.

"As a Cambodian, I am very happy to welcome these 18 heroic soldiers back in the country," she said.

Voeung Vy, the father of one of the soldiers captured in late July, said he would welcome his son home in Phnom Penh.

"I am so happy. I can't wait to see him. I miss him so much," the 51-year-old told AFP.

The soldiers received a rousing welcome from locals after being released. (Reuters: Soveit Yarn)

Cambodia's defence ministry said the 18 soldiers were "released and safely returned to the motherland" through a border crossing on Wednesday morning, local time, after being detained for 155 days.

Thailand's foreign ministry said they were repatriated "as a demonstration of goodwill and confidence-building", according to a statement.

Phnom Penh said it was hopeful their release would contribute to "building mutual trust".

Release a key part of ceasefire deal

Thailand and Cambodia agreed to a truce on Saturday, ending renewed military clashes that spread to nearly every border province on both sides.

The conflict stems from a territorial dispute over the colonial-era demarcation of their 800-kilometre border, where both sides claim centuries-old temple ruins.

Under the truce signed on Saturday, Cambodia and Thailand pledged to cease fire, freeze troop movements, and cooperate on de-mining efforts along their border.

Crowds gathered to welcome the soldiers home in Cambodia.   (Cambodian Ministry of Information/Handout via Reuters)

They also agreed to allow civilians displaced from border areas by three weeks of fighting to return home as soon as possible, while Thailand was to return the 18 captive Cambodian soldiers within 72 hours, if the ceasefire held.

Cambodia has said its soldiers were captured by Thai forces on July 29, nearly eight hours after a ceasefire that halted five days of deadly clashes went into effect.

Five months on, it had been unclear whether or when Bangkok would free the 18 men, after Thailand accused Cambodia of violating their most recent pact by flying more than 250 drones over its territory on Sunday night, and a three-day truce observation period ended Tuesday without an announcement of the soldiers' release.

But notice came from Phnom Penh on Wednesday, with Cambodian information minister Neth Pheaktra confirming the "18 heroic soldiers" had arrived back on Cambodian soil.

Disputed border issue remains

The United States, China and Malaysia had brokered a truce to end the fighting between Cambodia and Thailand in July, but the ceasefire was short-lived.

In October, US President Donald Trump jetted to Malaysia to oversee the signing of a follow-on declaration, touting new trade deals after the neighbours agreed to prolong their truce.

That pact said Thailand would "promptly release" the captured Cambodian soldiers.

But Bangkok suspended the agreement the following month, after Thai troops were wounded by landmines while on patrol at the border.

While the two nations agreed on Saturday to stop fighting, they still need to resolve the demarcation of their disputed border.

Cambodia said on Monday it had requested Thailand join a bilateral meeting in Cambodia in early January "to discuss and continue survey and demarcation work".

But Bangkok said on Tuesday the task may need to wait for the next government, after Thailand holds general elections in February.

AFP