The two leaders will discuss the North's denuclearisation and how to establish peace on the Korean peninsula.
The meeting at a North Korea-controlled building in the border village of Panmunjom comes as the global community waits to see if North Korea will begin abandoning its nuclear weapons, something officials suggested would happen after Kim's summit with President Donald Trump in June in Singapore.
North Korea has denounced US-led efforts to maintain sanctions despite what Pyongyang says are goodwill gestures, including halting its weapons testing and returning the remains of USA troops killed in the 1950-1953 Korean War.
They agreed to hold the third inter-Korean summit between President Moon Jae-in and North Korean leader Kim Jong-un in Pyongyang in September, when the leaders are expected to discuss ways to end the Korean War within the year.
"We agreed to hold an inter-Korean summit within September in Pyongyang" the two Koreas said in a joint press statement issued after the meeting.
Moon was part of the South Korean delegation which travelled to Pyongyang for the second inter-Korean summit held in October 2007.
The agreement was reached during high-level talks between the two sides at the Panmunjom border village on Monday.
Earlier he used a proverb describing a very intimate friend to refer to inter-Korean ties, saying: "We have opened an era where we are advancing hand in hand rather than standing in each other's way". Moon's spokesman, Kim Eui-keum, said it would be logistically hard to hold the summit before Sep 10, CNN reports.
Cho addressed the possibility of Pyongyang raising the issue of sanctions to the South, and said: 'We will explain our position to the North'.
Kim and Moon met for the first time in April and agreed on steps towards nuclear disarmament.
The rapid rapprochement between the two neighbours began this year ahead of the Winter Olympics in the South and paved the way for a landmark meeting between Kim and US President Donald Trump in Singapore in June.
Washington, which cancelled an annual joint military exercise with South Korea that had taken place in August in previous years, has refused to ease sanctions until North Korea finally and fully denuclearizes. Meanwhile the USA has urged the worldwide community to maintain tough sanctions on the isolated regime.
Amid a lack of progress on denuclearization talks between the USA and North Korea, South and North Korea held high-level talks Monday. Both parties spoke about North Korea's nuclear disarmament efforts and global sanctions, but provided few other details on the meeting.
A spokesman for South Korea's presidential Blue House said on Sunday officials hoped such details would be decided at Monday's talks.
- In wake of critical book, Trump calls ex-staffer ‘a lowlife’
- Khamenei Acknowledges Iran's Problems 'Internal,' Not Purely U.S. Sanctions
- Trump condemns racism on Charlottesville anniversary
- I heard Trump using n-word, says former aide Omarosa Manigault Newman
- NASA Parker Solar Probe launches on mission to high-five the sun
- Simona Halep wins second Rogers Cup title
- Cristiano Ronaldo lauded by Juventus coach Massimiliano Allegri after goal-scoring debut
- Meghan Markle’s mum Doria Ragland is ‘moving to the UK’
- Manchester United to appoint Director of Football to solve transfer woes
- More than 400 injured in violent protests in Romania