North Korea is to send a delegation to the 2018 Winter Olympic Games taking place in South Korea in February, officials from the South say.
The breakthrough announcement came as the countries met for their first high-level talks in more than two years.
The delegation will include athletes, officials, and supporters.
South Korea also proposed holding family reunions during the Winter Olympics for people separated by the Korean War.
The talks began early on Tuesday in the Panmunjom "peace village" in the demilitarised zone (DMZ) at the border.
There are five senior officials on each side.
In his New Year address, North Korean leader Kim Jong-un had said he was considering sending a team to the Olympics. South Korea's Olympics chief had said last year that the North's athletes would be welcome.
Following Mr. Kim's overture, the South then proposed high-level talks to discuss the North's participation, but the North only agreed to the talks after the US and South Korea agreed to delay their joint military exercises until after the Olympics. The North sees the annual drills as a rehearsal for war.
Some critics in the US see the North's move as an attempt to divide the US-South Korea alliance.
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