Crown Prince Mohammed bin Salman met Sadr in a rare meeting on Monday, where the two leaders discussed "improving trade relations" via a new Saudi consulate in Najaf.
"The Custodian of the Two Holy Mosques [a formal title for the King of Saudi Arabia] will issue an additional $10 million to help the internally displaced persons via the government of Iraq," a statement from al-Sadr's office said.
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The leadership of the Iraqi militia umbrella organisation, Hashd al-Shaabi [Popular Mobilisation Forces], welcomed the visit, adding that "Iraq is an Arab country and cannot abandon its Arab (roots)".
"Sadr's visit to Saudi Arabia confirms that Iraq distances itself from the regional sectarianism that has arisen amid complex conditions in the region," said Karim Nuri, leader of Hashd al-Shaabi.
The New Arab's correspondent in Iraq reported that Sadr's office had also been awarded special visas to attend this year's Hajj pilgrimage.
By contrast, the official Saudi news agency, SPA, reported only that the two officials had met and discussed improving bilateral ties.
Sectarianism between Sunni and Shia Muslims in Iraq has extended to breaking point in recent years, with numerous reports emerging of pro-Shia militias murdering and forcibly removing Sunni civilians in the country's south.
Some academics have pointed to the use of sectarianism in Iraq, Yemen and Syria as a front for a proxy war between the two regional powerhouses, Iran, a predominantly Shia nation, and Saudi Arabia, majority Wahhabi Sunni.
As a result of these conditions, both sides made statements distancing themselves from the reality on the ground.
"Sadr and Bin Salman agreed to continue using a language of moderation and to get rid of this sectarian discourse," said Sadr's spokesperson, Salah al-Obeidi.
The Saudi Crown Prince reportedly also "admitted mistakes were made in the former Saudi administration", according to Obeidi, adding that these mistakes had "helped Iran dominate Iraq".
Iran and Saudi Arabia's rivalry has played out in proxy wars across the region, with Prince bin Salmansaying in May there was no possibility for dialogue with Iran, because of its ambitions "to control the Islamic world."
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