Senior aides to Kim Jong-un and President Park Geun-hye will meet at the Panmunjom truce village on the border at 09:00 GMT, the Blue House said.
North Korea had threatened “strong military action” if South Korea did not stop border loudspeaker broadcasts.
Following an exchange of fire on August 20, North Korea declared a “semi-state of war”, state media reported.
South Korea said that it would be represented by national security adviser Kim Kwang-jin and Unification Minister Hong Yong-pyo, and North Korea would send senior officials Hwang Pyong-so and Kim Yong-gon.
North Korea had earlier issued a deadline for the dismantling of banks of loudspeakers, which have been blasting news bulletins, weather forecasts and music from South Korea. It had moved artillery into positions to fire on them.
South Korea has evacuated almost 4,000 residents from border areas and warned that it would “retaliate harshly”.
US and South Korean fighter jets have been flying in formation near the border.
The two Koreas remain technically at war, because the 1950-1953 conflict ended in an armistice, not a peace treaty.
In 2004, South Korea and North Korea reached an agreement to dismantle their propaganda loudspeakers at the border.
The broadcasts were part of a program of psychological warfare, according to South Korean newspaper Korea Times, to deliver outside news so that North Korean soldiers and border-area residents could hear it.
On August 10, South Korea restarted broadcasting in an apparent reaction to two South Korean soldiers being injured in a landmine explosion in the demilitarized zone that was blamed on North Korea.
According to military authorities, days later North Korea also restarted its broadcasting of anti-South propaganda.
However, some reports said that the quality of the North Korean loudspeakers is so bad that it is difficult to understand what they are saying.
South Korea had previously threatened to restart broadcasts in 2010 but although the loudspeakers were reinstalled at that time, they were not put into use, with the South using FM broadcasts into North Korea instead.
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