Hundreds of thousands of migrants from impoverished Myanmar are estimated to be working - many of them illegally - in more-developed Malaysia.
"Malaysia acknowledged the contribution of Myanmar labour force in Malaysia's economic development and agreed to expand and improve the cooperation," the Malaysian government said in a statement after the talks.
It will issue memorandum of understanding to formalise its intention to "safeguard the rights and interests of Myanmar workers in Malaysia", the statement said.
It did not provide any further details.
The talks were held on the second day of Myanmar president's two-day trip to Malaysia, his first state visit to the country.
Tens of thousands of workers in Malaysia are Muslim Rohingya who have fled what they describe as decades of oppression in majority-Buddhist Myanmar.
The Rohingya exodus has gained pace since Muslim-Buddhist bloodshed erupted in 2012 in the western Myanmar state of Rakhine.
Police say that a number of killings in Malaysia last year involving Myanmar nationals are linked to the ethnic strife back home.
Muslim-majority Malaysia has no laws to protect refugees though it accepts them temporarily. Those who are un-registered face arrest and languish in detention unless granted coveted UN refugee status.
Activists have complained that low-wage foreign workers are conned by recruitment agents and mistreated at work, with little recourse for legal action.
The two nations also agreed to cooperate on other sectors include bilateral trade, oil and gas, tourism and education.
Myanmar is only Malaysia's 38th-largest trading partner globally, and seventh-largest within ASEAN, according to Malaysian data.
Total bilateral trade in 2014 reached US$864 million [K864 billion], based on current exchange rates.
But Malaysian officials have said the nascent trade relationship is growing fast and have expressed a desire for Malaysian firms to take advantage of Myanmar's opening-up by moving into its markets.
Myanmar is gradually emerging from decades of authoritarian rule and has embarked on democratic reforms that have won praise abroad, though some observers warn they appear to be stalling.