The AU, the main political, economical and diplomatic union of African nations, was established in 2002 as a replacement to the Organization of Arfican Unity (OAU).
Israel, once an observer member in the OAU until its dissolution in 2002, lost its status in the newly formed AU following pressure from former Libyan dictator Muammar Gaddafi.
In 2016, The Jerusalem Post reported that Israel looked to regain observer status in the AU, as the Palestinian Authority were granted this status in 2013.
On Thursday, Ambassador to Ethiopia Aleleign Admasu submitted his letter of credence as observer to the African Union to Chairperson Félix Tshisekedi.
"This is a day of celebration for Israeli-African relations," said Foreign Minister Yair Lapid. "This diplomatic achievement is a step forward in improving Israel's foreign relations with the continent, following two anomalous decades," Lapid added.
Israel holds formal relations with 46 African nations, all members of the African Union. In recent years, relations were renewed with Guinea and Chad, who cut their diplomatic ties to Israel in 1967 and 1972 respectively, with Chad going as far as considering opening an embassy in Jerusalem.
The statement released by the Foreign Ministry claims the reestablishment of relations between Israel and the AU will aid both sides in combatting terrorist threats all over the continent, as well as cooperating in mitigating the spread of COVID-19.