Veera Somkwamkid -- a former leader of Thailand's "Yellow Shirt" royalist movement -- was jailed for eight years in 2011 while his secretary Ratree Pipattanapaibul got six years, in a case that fanned bilateral tensions.
Cambodia is preparing to pardon Ratree and to reduce the sentence for Veera to coincide with next month's cremation of Sihanouk, who died last October aged 89, the foreign ministry said in a statement.
Veera could also receive a pardon in the future, it said.
It did not specify the size of the cut to Veera's jail term, but Thai Prime Minister Yingluck Shinawatra told reporters in Bangkok that it was expected to be reduced by six months.
Veera and Ratree were among seven Thais arrested by Cambodia in late 2010 while inspecting disputed border territory. The other five -- including a ruling party politician -- received suspended sentences.
The border has never been fully demarcated, partly because it is littered with landmines left over from decades of war in Cambodia.