South Korean Olympic Committee spokesman Baek Sung-il confirmed the decision yesterday, after months of speculation.
Teams from the two countries have marched together during opening ceremonies at major events but not competed together so far.
They have been bitter rivals in almost every field for more than half a century.
"We had discussed making a single team since we jointly marched in such international events six times," Baek Sung-il, said.
"As exchanges between South and North Korea have been progressing, the mood was ripe for reaching such an agreement."
Baek said the two sides would meet again in Kaesong, a city just north of the Demilitarised Zone, on December 7, to discuss the details of how to form a joint team.
The selection process for the joint team and its budget have yet to be worked out, Yonhap cited South Korean sports officials in Macau as saying.
The communist North and capitalist South formed a single table tennis team and a soccer team in the 1990s but the experiment did not continue.
