Billions of dollars in aid were frozen last year after Riyadh decried Hezbollah's influence in Lebanon
Saudi Arabia and Lebanon agreed on Tuesday to hold talks on restoring a $3bn military aid package, opening a "new page" in relations, a Lebanese official source said.
"The blockage is lifted," said the official in the delegation of Lebanese President Michel Aoun, who held talks over lunch with King Salman in the Saudi capital.
After a tense year, which saw Saudi Arabia freeze the aid deal over what it said was the dominance of Lebanon's Shia Hezbollah movement, Aoun arrived in Riyadh on Monday night with a delegation of ministers.
It was his first trip to the kingdom since his election in November, which ended a two-year deadlock between Iran- and Saudi-backed blocs in the Lebanese parliament.
Aoun, a Maronite Christian former army chief backed by Hezbollah, clinched the presidency with shock support from Saudi ally Saad Hariri, a leading Sunni figure who in return was named prime minister.
Analysts say Saudi Arabia is hoping for a more stable Lebanon, after concerns over the role played by Hezbollah in the Lebanese government and the threat posed by militants, as well as the war in neighbouring Syria.
The Iran-backed group Hezbollah has fighters in Syria supporting the forces of President Bashar al-Assad, while Saudi Arabia, Iran's regional rival, backs rebels opposed to his government.
Last March Riyadh declared Hezbollah a "terrorist organisation" and urged Saudi citizens to leave Lebanon.
In February, the kingdom halted the $3bn military aid package to Lebanon to protest what it said was "the stranglehold of Hezbollah on the state".
The halted programme would have seen Riyadh fund the transfer of vehicles, helicopters, drones, cannons and other military equipment from France, which has been seeking to boost arms sales to Saudi Arabia and the Middle East.
The Lebanese official told AFP that a "new page" in relations with Riyadh had been turned, and said the aid was "going to move".
"There is truly a change. But when and how, we have to wait to see," the official said on condition of anonymity.
He added that King Salman's son, the powerful Defence Minister and Deputy Crown Prince Mohammed bin Salman, will discuss with his Lebanese counterpart how to move the package forward.
After Aoun's election, France's foreign ministry said it was in "close dialogue" with Lebanon and Saudi Arabia in hope of a deal.
Aoun told Saudi state news channel al-Ekhbaria that his ministers of foreign affairs, education, finance and information would meet their Saudi counterparts "to find some fields of cooperation".
Asked about the military aid, Aoun said, "Of course we will discuss all the possible issues."
Syria's nearly six-year civil war has been a major fault line in Lebanese politics, and the country hosts more than one million Syrian refugees.
Aoun said that Lebanon's partners "have agreed to build Lebanon, regardless of the results in the other countries, because building Lebanon is for all, and secondly, security and stability is for all".
He told al-Ekhbaria that his country's internal political situation had improved, and expressed confidence that "balance" can be maintained.
"The state must realise, and maintain, security and stability for individuals and groups even if there are different political visions regarding neighbouring and regional countries," Aoun said.