Loudspeaker broadcasts started by Seoul to infuriate Pyongyang, after a landmine at the border injured two of its soldiers earlier this month.
The decision to halt propaganda broadcasts taken after North Korea expressed regret over the land mine blast.
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".
"South Korea would stop the loudspeaker broadcasts at midday on Tuesday (03:00 GMT) - as North Korea had demanded," said a joint statement issued by two countries.
North Korea also 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.