Sweden's aid to Cambodia started in 1979 with humanitarian efforts. In the 1990s, a long-term development cooperation began.

On 11 June 2020, the Government decided to focus bilateral development cooperation in Cambodia and to phase out Sweden's support to the education sector, decentralisation and the environment and climate. The bilateral country window of the Strategy for Sweden's Regional Development Cooperation with Asia and the Pacific Region 2022-2026 enabled continued direct support to non-state actors in Cambodia in the areas of human rights, democracy, and the rule of law. In November, the Swedish embassy in Phnom Penh was closed, and on 1 December 2021, the embassy in Cambodia was converted into a section office, under the embassy in Bangkok.

On 22 December 2023, the government decided to phase out bilateral development cooperation to Cambodia as of 31 December 2024 and thus it was also decided that the section office in Phnom Penh will be closed on 30 September 2024. All bilateral development cooperation until December 2024 will be moved to Sida HQ in Stockholm from 15 August.

The Embassy in Bangkok will continue to represent Sweden in Cambodia, and the Strategy for Sweden's Regional Development Cooperation with Asia and the Pacific Region 2022-2026 will continue to cover Cambodia with support from a regional perspective.