Defence Minister Ahmad Zahid Hamidi said the move was made during his meeting with Defence Secretary Robert Gates in the US last week.
"The US defence secretary had agreed to upgrade Malaysia's participation in Cobra Gold, an exercise carried out with several other countries where Malaysia was previously merely an observer," he said according to the state news agency Bernama.
The huge exercises, which have been running for some three decades, involve among others the militaries of the Philippines, Singapore, the United States, and Thailand which hosted the 2010 session.
Ahmad Zahid said Malaysia's involvement would help it improve techniques and war strategy including the use of sophisticated equipment. He said other agreements were struck with the US including on officer training and aircraft maintenance.
After long years of frostiness, relations between the US and Muslim-majority Malaysia have warmed in recent months, notably with talks between US President Barack Obama and Malaysian Prime Minister Najib Razak in May.