The two countries reached the agreement on Friday following three days of talks at the North's Mount Kumgang resort. The two sides say they have agreed to hold six days of temporary reunions involving a total of 200 families.
The reunions will start on September 26, just before Korea's Chuseok day, one of the year's two most important holidays.
The agreement is the latest sign of easing tensions between the two sides after more than a year of hostility. The last time reunions took place was in October 2007.
Between 2000 and 2007, the Korean Red Cross conducted 16 face-to-face family reunions and several via video conference. Officials estimate that 600,000 South Koreans have relatives in the North.
South Korea's Yonhap news agency says before the agreement was reached Friday, the South withdrew a demand that the joint statement mention South Korean prisoners of war and civilians believed kidnapped by the North during the Cold War era.
Seoul says 494 of its people, mostly fishermen, were seized in the decades following the war and more than 500 prisoners of war were never sent home.
Pyongyang says it is not holding anyone against their will.
In recent weeks, North Korea has been pushing to reach out to Seoul and Washington following a series of provocations, including nuclear and missile tests, and international sanctions to punish the North's communist government for its defiance of United Nations resolutions.
Agencies
