South Korea has halted its propaganda broadcasts into North Korea as part of a deal to defuse tension.
Seoul had begun the loudspeaker broadcasts, which infuriate Pyongyang, after a landmine at the border injured two of its soldiers earlier this month.
The tensions bubbled over in a brief exchange of fire at the heavily guarded border last Thursday.
The deal was reached after the North, which initially denied planting the mine, agreed to express "regret".
South Korea's President Park Geun-hye said the deal "could serve as an occasion to resolve all inter-Korean issues through trust".
'No leaders' summit'
The late-night agreement came after marathon talks at the "truce village" of Panmunjom inside the demilitarised zone (DMZ).
A joint statement from the two countries - technically at war since the 1950s - said South Korea would stop the loudspeaker broadcasts at midday on Tuesday (03:00 GMT) - as North Korea had demanded.
The North agreed to end its "semi-state of war", pulling back troops deployed to the frontline.
Both countries have also agreed to work towards a resumption of reunions for families separated by the 1950-53 Korean War, a recurring point of contention.
But South Korea's Defence Minister Kim Min-seok said the South would "maintain its defence posture for the possibility of another provocation".
National security adviser and chief negotiator Kim Kwan-jin said there would be follow-up talks to discuss a range of issues on improving ties
But he said it was not the right time to push for a leaders' summit.
Analysis: Stephen Evans, BBC News, Seoul
The outcome is what seasoned Korea watchers expected, though the tension has been cranked up much higher than in recent years.
It's not clear how much these regular crises are manufactured and how much they are the result of misunderstandings in a highly-armed, permanent stand-off.
Some critics of Pyongyang say it generates crises to remind South Korea and the US that it is there and should be treated as important - and also to keep its own citizenry on high alert.
Others say the government in Seoul could do more to improve relations with the North, pointing at what they say are provocative military exercises with the US.
But supporters of the South Korean government say: "Why go soft on a regime that is developing nuclear weapons to target at Seoul?"
Both Koreas used to routinely blast propaganda across their shared border, but agreed in 2004 to abandon the tactic.
The South resumed the broadcasts - a mix of news, weather reports and Korean pop music - earlier this month, apparently in retaliation for the landmine incident on 4 August, in which two of its soldiers were seriously injured.
The North had denied planting the mines, and also denied shelling South Korea last week - an incident that prompted artillery fire from the South.
Pyongyang had ordered its troops to be "on a war footing" on Friday while Seoul warned that it would "retaliate harshly" to any acts of aggression. About 4,000 residents were also evacuated from border areas in South Korea.