Saudi Arabia on Sunday replaced its envoy to Iraq whose comments about Iranian involvement in Iraqi affairs led to diplomatic tension with Baghdad.

Thamer al-Sabhan in 2015 became the first Saudi ambassador to be posted to Iraq since the 1990 Iraqi invasion of Kuwait - an appointment which was seen as heralding closer cooperation in the fight against Islamic State militants in Iraq, Syria and Saudi Arabia.

But in August Iraq asked Riyadh to replace Sabhan after his comments about Iranian involvement in Iraqi affairs and the alleged persecution of Sunni Muslims angered local Shi'ite Muslim politicians and militia leaders.

Sabhan was appointed minister for Arab Gulf Affairs, a newly created position, according to state news agency SPA.

He will be replaced by Abdulaziz al-Shamri, Riyadh's military attache in Germany, who will be appointed as the charge d’affaires to the Saudi embassy in Baghdad, Sabhan said on his Twitter account on Friday.

Iraqi Shi'ite politicians and militias had made repeated calls to expel Sabhan, who has been calling on the Iraqi government to exclude Shi'ite paramilitary groups from its military campaign against Islamic State in order to avoid abuses against Sunnis in Iraq.

Baghdad's move underscores the depth of enmity between Sunni and Shi'ite Muslim powers as sectarian conflicts rage in Syria, Yemen and Iraq.