Exoskeleton systems are increasingly employed in both new and existing buildings to enhance seismic performance. Addressing the critical challenges of energy dissipation and thermal stress mitigation in these systems, an out-of-plane deformable X-shaped energy dissipation brace (OPD-XEDB), integrating an out-of-plane X-shaped brace with a shear-type metallic damper, was proposed in this study. A seismic design methodology for OPD-XEDB was firstly developed, ensuring effective energy dissipation of the damper before any potential brace buckling. Following this methodology, two specimens, exhibiting distinct failure modes of damper shear fracture and brace buckling, were designed and subjected to quasi-static loadings to explore their energy dissipation mechanisms. Upon these experimental results, a numerical model incorporating buckling and pinching behaviors was proposed and calibrated, effectively capturing the hysteretic responses of the specimens. This model was then employed in a comprehensive numerical analysis, validating the effectiveness of design methodology and determining the optimal specifications for the OPD-XEDB in a prototype building. Ultimately, thermal analysis and nonlinear time history analysis were conducted on the prototype building. The thermal analysis proved the effectiveness of the OPD-XEDB's out-of-plane configuration in mitigating thermal stress by out-of-plane deformation, significantly mitigating thermal stress in braces and interconnected moment frames by 96.59–96.66 %. The time history analysis revealed that the dampers in OPD-XEDBs dissipated 11.6–23.2 % of total seismic energy, effectively preventing substantial buckling in the X-shaped braces. This energy dissipation mechanism led to a remarkable 79.7 % reduction in steel consumption for post-earthquake retrofitting, thereby significantly enhancing the seismic resilience of the primary structure.