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North Korea will send its athletes to the Winter Olympics in the South, the rivals said on Tuesday after their first formal talks in more than two years following high tensions over Pyongyang's nuclear weapons programme.
The two sides also decided to hold military talks to ease tensions and to restore a military hotline closed since February 2016.
Seoul and Olympic organisers have been keen for Pyongyang - which boycotted the 1988 Summer Games in the South Korean capital -- to take part in what they repeatedly proclaimed a "peace Olympics" in Pyeongchang next month.
But the North had given no indication it would do so until leader Kim Jong-Un's New Year address last week, instead pursuing its banned weapons programmes in defiance of United Nations sanctions, launching missiles capable of reaching the United States and detonating its sixth and most powerful nuclear test.
"The North Korean side will dispatch a National Olympic Committee delegation, athletes, cheerleaders, art performers' squad, spectators, a taekwondo demonstration team and a press corps and the South will provide necessary amenities and facilities," they said in a joint statement.
Today's talks were held in Panmunjom, the truce village in the Demilitarised Zone that splits the peninsula.
The North's delegation walked over the Military Demarcation Line marking the border to the Peace House venue on the southern side, just yards from where a defector ran across in a hail of bullets two months ago.
Looking businesslike, the South's Unification minister Cho Myoung-Gyon and the North's chief delegate Ri Son-Gwon shook hands at the entrance to the building, and again across the negotiating table.
Ri wore a badge on his left lapel bearing an image of the country's founding father Kim Il-Sung and his son and successor Kim Jong-Il, while Cho sported one depicting the South Korean flag.
"Let's present the people with a precious new year's gift," said Ri. "There is a saying that a journey taken by two lasts longer than the one travelled alone."
The atmosphere was friendlier than at past meetings, and Cho told Ri: "The people have a strong desire to see the North and South move toward peace and reconciliation."
But there was no mention in the joint statement of a proposal by Seoul to resume reunions of families left divided by the Korean War, or of an offer by the North to send a high-level delegation to the Games.
Even so it was a radically different tone from the rhetoric of recent months, which have seen the North's leader Kim Jong-Un and US President Donald Trump trade personal insults and threats of war.
Pyongyang has defied international pressure in recent months and launched missiles capable of reaching the US mainland, as well as testing what it said was a hydrogen bomb.
Seoul has been keen to proclaim the Games in Pyeongchang, just 80 kilometres south of the DMZ, a "peace Olympics" but it needed Pyongyang to attend to make the description meaningful.