They also agreed to field a joint women's ice hockey team after rare talks at the truce village of Panmunjom, the BBC reports.
These are the first high-level talks between the two Koreas in more than two years.
The Games will take place between February 9-27 in Pyeongchang in South Korea.
Read alsoRussia goes to war with Winter Olympics ban - The GuardianIf the plans are realized, a hundreds-strong North Korean delegation - including 230 cheerleaders, 140 orchestral musicians and 30 taekwondo athletes - could cross into the South via the land border to attend.
Both South Korea's hockey coach and conservative newspapers had expressed concern about the prospect of a united hockey team, saying it could damage South Korea's chances of winning a medal.
Tens of thousands of people are said to have signed online petitions urging President Moon Jae-in to scrap the plan.
And it will have to be approved by the International Olympic Committee (IOC) meeting in Lausanne, Switzerland, on Saturday, because North Korea has missed registration deadlines or failed to qualify.