Officials from North and South Korea have agreed to hold the first high-level meeting since 2007, the South Korean Yonhap news agency says.
It follows hours of preliminary talks in the truce village of Panmunjom aimed at rebuilding trust between the two Koreas.
The talks are due to take place in Seoul on Wednesday and Thursday, Yonhap adds.
The meeting comes after months of rising tension between both sides.
The new South Korean President, Park Geun-hye, has said she wants to build trust after a period of intense hostility under the previous administration in Seoul.
A South Korean spokesman told reporters that the talks in Panmunjom, where the armistice agreement ending fighting in the 1950-53 Korean War was signed, had gone smoothly and “without any argument”.
Joint commercial zone
The Unification Ministry in Seoul said the two sides had reached a partial understanding on outstanding issues.
Unification Minister Ryoo Kihl-jae will lead South Korea’s delegation to the meeting later this week and has asked the North to send the head of the United Front Department of the ruling Workers’ Party, Kim Yang-gon.
Meanwhile, North Korea’s Central News Agency said the main point of discussion would be restoring suspended commercial links, particularly the Kaesong joint commercial zone which was shut down by the North in April as tensions escalated.
Other issues up for discussion are the reunion of separated families and their relatives and other humanitarian issues.
Ties between the two Koreas deteriorated earlier this year in the wake of the North’s nuclear test on 12 February.
Pyongyang withdrew its workers from the Kaesong in April, apparently angered by tightened UN sanctions after the nuclear test and annual South Korea-US military drills.
The Kaesong commercial zone, seen as a symbol of North-South co-operation, had run successfully just inside North Korea for more than eight years.
Around 53,000 North Korean workers are employed at the Kaesong factory complex by more than 120 South Korean factories.
The zone is a key source of revenue for the North and the biggest contributor to inter-Korean trade.
Last Thursday, the North offered talks with the South on the resumption of operations and said it would reconnect a Red Cross hotline if Seoul – which had been seeking such talks – agreed.
The talks in Panmunjom closely follow a summit in California between US President Barack Obama and Chinese President Xi Jinping.
Both leaders agreed that North Korea had to denuclearise and that neither country would accept North Korea as a nuclear-armed state, US National Security Advisor Tom Donilon said on Saturday.
China is seen as a key ally of Pyongyang.