The news came the same day US President Donald Trump and the North's Kim Jong Un held a historic summit in Singapore, as Washington seeks to persuade Pyongyang to give up its nuclear arsenal.
The North Korean leader's estranged relative, Kim Jong Nam, was murdered at Kuala Lumpur airport in February last year by assassins who smeared a nerve agent on his face, in a Cold War-style killing that shocked the world.
The killing -- widely blamed on Pyongyang -- sparked a diplomatic row with Kuala Lumpur, one of the North's few allies, with both countries expelling each other's ambassadors and barring their citizens from leaving.
Malaysia's embassy has not been staffed since April last year and Kuala Lumpur had reportedly been considering permanently closing the mission and moving its North Korea services to Beijing.
But Prime Minister Mahathir Mohamad, who came to power after a shock election victory last month, said this would not happen, in comments published Tuesday.
"We will re-open the embassy," he told the Nikkei Asian Review.
He also said he had was hopeful about the US-North Korea meeting.
"If North Korea promises to abandon nuclear weapons, there will be less tension," he said, in an interview before the leaders' meeting.
"We should take North Korea at face value and get it to participate in international negotiations to moderate the rigid attitude it had before.
"We should take it as genuine, and try to establish a good relation including a trade relation with North Korea."
Before Kim's assassination, Kuala Lumpur and Pyongyang had unusually warm relations, with North Koreans able to travel to Malaysia visa-free -- a rarity for the sanctions-hit country.
That deal was cancelled after the murder of Kim, who was once heir apparent to the North Korean leadership but fell from grace and went to live in exile.
Two women, one from Vietnam and one from Indonesia, were arrested over the assassination and are standing trial.
They maintain their innocence. Their lawyers insist North Korean agents fooled them into thinking they were carrying out pranks for a reality TV show, and not an assassination.
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