The Arar border crossing was opened for trade by Iraq and Saudi Arabia for the first time in 30 years, according to the Iraqi border ports commission.
Iraqi and Saudi officials, among them the Saudi ambassador to Iraq, visited the area on Wednesday.
The crossing had been closed since 1990 after the two countries severed ties following Saddam Hussein's invasion of Kuwait.
"The Saudi-Iraq relations have been cut for about 27 years, and now we celebrate an accomplishment that suits the Saudi-Iraqi relations," Saudi Ambassador Abdulaziz Alshamri said.
"We welcome all Iraqi products to be exported to Saudi and through this border, there will be an exchange of visits between the two countries," he added.
Saudi Arabia has been seeking the support of Iraq as part of an effort to reduce the increasing regional influence of Iran. Iraq, meanwhile, is looking for economic benefits from closer ties with its southern neighbor.
The Saudi-Iraqi rapprochement extends back to 2015, when Saudi Arabia reopened its embassy in Baghdad following a 25-year break.
In July Saudi Arabia and Iraq signed investment agreements on energy and sports.