Pyongyang will send a preliminary inspection team “at the earliest possible time” to hammer out logistics such as the performance venue, stage conditions and the installation of equipment, according to a joint press release.
The musicians will cross the border by foot at Panmunjom, on the request of North Korea.
The crossing, located in the demilitarised zone, was where a North Korean soldier staged a daring defection to the South in November.
Officials from the two Koreas, technically still at war after their 1950-53 conflict ended in a truce, not a treaty, met on the North side of the border truce village of Panmunjom to discuss North Korea sending performers – for the first time in 18 years – to the Olympics in Pyeongchang.
The two sides agreed that the orchestra would stage performances in the capital, Seoul, and at Gangneung, near Pyeongchang, the South’s Unification Ministry said in a statement.
The decision to host the orchestra “contributes to improving relations and recovering the cultural homogeneity” between the two Koreas, the South’s ministry said.
The two Koreas separately agreed to hold working talks on Wednesday on the North’s athletes attending the Olympics, the ministry said. They will also hold talks hosted by the International Olympics Committee on Saturday.
A North Korean diplomat in Geneva said: “The IOC will have no say on the art team. That is something that has to be discussed between the two sides.”
North Korea is pursuing its missile and nuclear programmes in defiance of UN Security Council and other sanctions and regularly threatens to destroy the United States and its two key Asian allies, South Korea and Japan.
In bellicose exchanges in recent weeks, US President Donald Trump has derided the North Korean leader as a “maniac” and referred to him as “little rocket man”. Kim has responded by calling the U.S. president a “mentally deranged U.S. dotard”.
But fears of war have eased after the first round of intra-Korean talks in more than two years last week, which Trump has welcomed.
Choi Moon-soon, governor for the Games’ host province, told Reuters the two countries’ orchestras may hold a joint concert.
The North’s orchestra, called the Samjiyon Band, is the country’s main art troupe along with the Moranbong Band, women who regularly stage musical performances and plays calling for loyalty to the leader, Kim Jong Un.
North Korea is planning to send a large delegation to the Olympics in addition to the athletes and orchestra. South Korea is also seeking to form a united women’s ice hockey team with the North, according to media reports.