North Korea's williingness to abolish its missile facilities and close its main nuclear complex has been hailed as the end of the Korean War.
Speaking at their summit talks in Pyongyang, South Korean President Moon Jae-in and North Korean leader Kim Jong Un said they agreed to turn the Korean peninsula into a "land of peace without nuclear weapons and nuclear threats."
He also said he will visit Seoul in the near future, in what would be the first-ever visit to the South's capital by a North Korean leader.
North and South Korea plan to link up railways, allow family reunions and will seek to host the 2032 Olympics.
Until now, the two countries have technically still been at war, despite the armed conflict ending in the 1950s.
However, South Korea said afterwards that the agreements effectively mean the end of the Korean War.
A spokesperson said: "Leaders of the South and the North have in fact announced the end of the war on the Korean Peninsula by their agreements."
A 1953 armistice agreement ended the fighting but a peace treaty was never signed.
The latest summit will be a litmus test for stalled negotiations on the North's nuclear programme between Pyongyang and Washington, and for another meeting Kim recently proposed to U.S. President Donald Trump following their historic encounter in June in Singapore.
Kim pledged to work toward the "complete denuclearisation of the Korean peninsula" during his first encounter with Moon, and at his summit with Trump in June.
But discussions over how to implement the vague commitments have since faltered, with Washington demanding concrete action towards denuclearisation by North Korea before agreeing to a key goal of Pyongyang - declaring an end to the war.
North Korea has given no indication it is willing to give up its nuclear arsenal unilaterally and is seeking relief from crippling international sanctions.
North Korea has offered to stop nuclear and missile tests but did not allowed international inspections for a dismantlemnt of its only known nuclear site in May, drawing criticism that its action could not be verified and could be easily reversed.