The Association of Southeast Asian Nations (ASEAN) has agreed in principle to admit East Timor as the group's 11th member, the bloc said in a statement on Friday.
The half-island nation, officially called Timor Leste, will also be granted observer status at high-level ASEAN meetings, the bloc said after regional leaders met in Phnom Penh for a summit.
"We...agreed in principle to admit Timor Leste to be the 11th member of ASEAN," the statement said, adding that next steps would include a "roadmap for full membership" to be submitted at next year's summit.
The East Timorese voted for independence from a brutal occupation by neighbouring Indonesia in a 1999 UN-supervised referendum, and the country was officially recognised by the United Nations in 2002, making it Asia's youngest democracy.
The resource-rich country of 1.3 million people immediately started the process of accession to ASEAN, but only formally applied for membership in 2011.