Natural Resources and Environment Minister Azmi Khalid said Malaysia would push its proposal for a fund at ministerial talks in the Philippines next month of the Association of Southeast Asian Nations (ASEAN).
He said the meeting would decide how much was needed to tackle the haze and how the fund would be managed.
Malaysia, whose capital is suffering "unhealthy" levels of haze because of smoke from land-clearing fires in Indonesia, initially tabled the proposal at talks in Indonesia earlier this month.
"The cost to bring the haze under control is exorbitant because the applicable method at present involves the use of aircraft for fighting forest fires," Azmi Khalid said, according to the Bernama news agency.
"Therefore it is only fair that other ASEAN countries share the cost of dousing forest fires in Indonesia, which has failed to tackle the problem over the last few years," he said.
The talks in the Philippines are part of a series by ASEAN which Azmi said will meet every three months to find short- and long-term measures to tackle the crisis.
ASEAN in 2002 agreed to join forces to fight forest and peat soil fires in member states but Indonesia has yet to ratify the agreement, much to its neighbours' irritation.
Kuala Lumpur's air pollution index soared into the inhealthy range Wednesday and Thursday as smoke drifted from illegal Indonesian fires.
Singapore's air quality was also poor this week, prompting the government to warn people with heart or respiratory conditions to stay inside and avoid exertion.
Indonesian farmers burn forests annually to clear land for agriculture, causing a haze that spreads across the region during the dry season, affecting tourism and increasing health problems.
Azmi said he had been told that at least a million hectares of land was being cleared in Kalimantan province on Indonesia's side of Borneo island which it shares with Malaysia.
"It is very likely that these forests are being burnt to clear up land, which is the reason why there is so much haze," he said according to The Star newspaper.