The defence technology agency plans to set up a joint centre with China to produce and maintain military equipment in the latest sign of the strengthening security relationship since a 2014 coup.
The plans to establish the facility -- and discussions on a Chinese naval centre to serve submarines Thailand ordered this year -- point to a growing Chinese security presence in the oldest US ally in the region as elsewhere in Southeast Asia.
The Defence Technology Institute (DTI) will set up Thailand's first commercial joint defence facility with China in Khon Kaen province in July, a defence ministry spokesman said.
It will be responsible for assembly, production and maintenance of Chinese land weapon systems for the army.
"All our production will be for domestic official usage," defence ministry spokesman Kongcheep Tantravanich told Reuters, adding that it could become an assembly and maintenance centre for all of Asean.
Specific details, he said, were subject to further discussions between the ministry and China North Industries Corporation, which makes tanks and weapons among other heavy equipment.
The company did not respond immediately to an emailed request for comment. Its website describes it as "a pioneer and leader of Chinese military trade, and an important team to implement China's Going Global strategy".
Maj Gen Kongcheep said the Chinese would provide training and technology transfer, but details of any Chinese personnel in Khon Kaen were among things being discussed.
The Chinese Defense Ministry did not respond when contacted by Reuters for comment.
China has become an increasingly important source of weapons for Thailand, particularly since the US and Western countries downgraded ties after the army seized power in 2014.
Major purchases since 2015 include orders for 49 Chinese tanks and 34 armoured vehicles worth over $320 million -- much more than the army has bought from other countries, although it also ordered helicopters from both Russia and the US.
The biggest Chinese purchase is the Royal Thai Navy's order for three submarines at a cost of over $1 billion.
Thai and Chinese armies and air forces have begun joint exercises, complementing Thailand's continuing drills with the US forces. On the civilian front, Thailand and China plan development of a high-speed rail link as part of Beijing's Belt and Road initiative.
Relations with the US are warming again too, however, particularly since new US President Donald Trump hosted junta leader Prayut Chan-o-cha at the White House.
The joint weapons manufacturing centre in Khon Kaen -- apparently similar to one in Pakistan -- could complement China's growing military presence in neighbouring Cambodia, said Paul Chambers, who has researched Thai military and regional security.
"It opens the door for the potential of growing Chinese military influence in mainland Southeast Asia," said Mr Chambers, of Naresuan University in Phitsanulok province.
New legislation taking effect next year will allow the DTI to operate on a commercial basis, but it will remain entirely under government ownership.
The Defence Ministry said the government was also holding preliminary discussions with Ukraine, Russia and South Africa about joint defence manufacturing facilities, similar to the deal with China.