Having been without power for three days, people and tourists on the two islands in Surat Thani woke up with electricity back to their homes and hotel rooms.
TV 3 reported that power was restored at 4am on Friday, two hours after engineers tested the line connecting with Surat Thani's mainland. The repairs finished at 2am, it added.
No officials were available for comments but short messages sent to the TV station from Koh Samui and Koh Phangan confirmed the report.
Surat Thani Governor Chatpong Chatphut declared the two islands a disaster zone after engineers failed to restore electricity on Thursday.
Mr Chatpong said declaring the islands a disaster zone will allow the province to spend an emergency budget of 50 million baht to help people affected by the prolonged power outage.
The governor also ordered the setting up of a temporary kitchen to prepare food for the people and sent trucks with water-making machines to areas where water production has been been halted.
A team of engineers on Thursday carried on with their repairs to an underground high-voltage cable, after spending the whole of Wednesday night trying in vain to restore power.
The electricity supply to the island was cut completely on Tuesday because of a rupture in a section of a 30km-long cable at tambon Taling Ngam in Samui district on the island.
The repairs could not be rushed as engineers had to make sure the work met international safety standards, said Wattana Phaekun, chief of the Provincial Electricity Authority's (PEA) customer service section for the South.
The repair work is 85% completed and officials were expected to be able to start supplying electricity by noon today, he said. The new deadline was the third after two previous delays.
Despite the assurance, provincial officials were sending power generators to the islands to meet emergency demand.
Koh Samui and Koh Phangan's hospitals can care for patients and tourists because the hospitals use generators, permanent secretary for public health Narong Shamethaphat said.
However, foreign tourists on Koh Phangan have mostly left after telecoms, restaurants and souvenir shops closed because of the blackout, Wanni Thaipanich, chairwoman of the Koh Phangan tourism promotion association, said.
Thanongsak Somwong, chairman of the Koh Samui tourism promotion association, said foreign tourists are sensitive about this kind of problem. "The blackout is expected to cause at least 12 billion baht in damage to tourism on Koh Samui," he said.
Acting PEA governor Namchai Lowatthanatrakun said the power cable rupture resulted from a surge in electricity demand from the high tourism season this month.
The PEA plans to start supplying electricity to the islands through a new underwater cable in March next year that will provide up to 200 megawatts of electricity, said Mr Wattana.