This research study aims at developing and investigating the mechanical and thermal properties of lightweight sandwich wall panels with good thermal insulation properties to reduce electric power for cooling of buildings. Within this study, several thermal insulation sandwich wall panels with two outer lightweight concrete layers and inner expanded polystyrene layer were developed and tested. Test parameters included the type of the outer concrete layers and the effect of using glass fiber reinforced polymer (GFRP) shear ties to connect the outer layers. Different ratios of polystyrene beads and vermiculite aggregates (53, 68 and 84% by volume of the natural coarse aggregates) were used to replace the natural coarse aggregates in the two outer concrete layers for better insulation properties and to develop lighter panels. Test results showed that using the GFRP shear ties was effective to connect the two outer layers of the panels. The results also revealed that increasing the amount of the polystyrene beads and the vermiculite aggregates decreased the thermal conductivity, the density, and the compressive strength of the panels. These values ranged from 0.41 to 0.25 W/m.K, 596 to 486 kg/m3, and 4.21 to 2.02 MPa respectively, for the panels with polystyrene beads. For the panels with vermiculite aggregates, these values were 0.46 to 0.34 W/m.K, 646 to 626 kg/m3, and 3.14 to 1.96 MPa, respectively. The results showed that the panels with polystyrene beads were stronger, lighter, and had better thermal properties. Using the developed panels will help to reduce the self-weigh of buildings resulting in smaller structural elements. In addition, the excellent thermal properties of the developed panels are expected to reduce power consumption and develop more sustainable buildings.