North Korea has said it will send a delegation to the 2018 Winter Olympic Games, taking place in South Korea in February, says Seoul.
The delegation will include athletes and supporters, amongst others.
The breakthrough announcement came as the countries met for their first high-level talks in more than two years.
South Korea also proposed holding family reunions during the Winter Olympics for people separated by the Korean War
The issue is a highly emotional one for both countries, and South Korea has constantly been pushing for more reunions to take place.
'Taekwondo demonstration team'
The talks are talking place in the Panmunjom "peace village" in the demilitarized zone (DMZ) at the border.
Speaking afterwards, Seoul's vice unification minster Chun Hae-Sung told journalists: "The North side proposed dispatching a high-level delegation, National Olympic Committee delegation, athletes, supporters, art performers, observers, a taekwondo demonstration team and journalists" to the Games.
Seoul has also called for military talks with North Korea, according to Mr Chun.
Ties between both Koreas have become increasingly tense since the last talks in 2015.
Relations broke down after Seoul suspended a joint economic project at the Kaesong Industrial complex in North Korea following a rocket launch and nuclear test by the North.
The incident led to North Korea ending all communication with Seoul, including cutting off telephone lines.
Tensions have risen in the years since, as the North continues to rapidly advance its banned nuclear weapons programme.