Speaking at a joint news conference in Pyongyang, South Korean President Moon Jae-in and North Korean leader Kim Jong Un said they agreed to turn the Korean peninsula into a "land of peace without nuclear weapons and nuclear threats" and take "prompt steps" towards the goal.
Declaring they had made a major step toward peace on the Korean Peninsula, the two leaders were side by side as they announced the joint statement to a group of North and South Korean reporters after a closed-door meeting Wednesday morning.
After the two leaders signed, military top brass from two Koreas, South Korean defense minister Song Young-moo and his North Korean counterpart No Kwang-chol, also signed the agreement and exchanged the documents.
"President Moon has ignited the spark of the historic talks between [North] Korea and the US", Mr Kim said.
"North Korea has agreed to permanently dismantle the Dongchang-ri missile engine test site and launch pads in the presence of global experts", Moon said after a two-day summit with his North Korean counterpart in Pyongyang.
"Hero remains to continue being returned home to the United States".
Even before the start of his three-day trip to Pyongyang on Tuesday, the South Korean president said the main objective of his trip was to restart the US-North Korea dialogue.
Pyongyang says it has destroyed its main nuclear and missile engine test site, and has halted atomic and ballistic missile tests, but USA officials and analysts believe it is continuing to work on its weapons plans clandestinely.
"We are not afraid of future challenges".
North and South Korea will make a joint bid to host the Summer Olympic Games in 2032, the countries have announced after a friendly summit.
North Korea has consistently refused to give up its nuclear arsenal unilaterally, and stressed that a formal declaration to end the 1950-53 Korean War should come first.
The joint statement also said that the leaders would push for a Korean Peninsula without nuclear weapons and to "eliminate all the danger of war".
The South Korean leader reciprocated, thanking Kim for making a "bold decision" to open lines of communication to ease tensions and for sending a delegation to the South Korean Winter Olympics in February.
U.S. President Donald Trump welcomed developments on Wednesday at an inter-Korean summit in the North Korean capital of Pyongyang as "very exciting".
The summit was an effort to try and preserve nuclear diplomacy with Washington, which has expressed its desire for more substantial disarmament moves from the North.
South Korea is pinning high hopes on Kim's remarks to Moon's special envoys earlier this month that he wanted to achieve denuclearization within Trump's first term in office ending in early 2021.