The office's opening in the North Korean border town of Kaesong is the latest in a series of reconciliatory steps the Koreas have taken this year.
The rival Koreas on Friday launched their first liaison office near their tense border to facilitate better communication and exchanges ahead of their leaders' summit in Pyongyang next week.
Vice Unification Minister Chun Hae-sung will serve as a co-head for the office along with Jon Jong-su, a vice chairman of the Committee for the Peaceful Reunification of the Country, a North Korean agency in charge of inter-Korean exchanges.
The 4-story building includes separate Northern and Southern offices and a joint conference room, and Seoul's unification ministry said it would become a "round-the-clock consultation and communication channel" for advancing inter-Korean relations, improving ties between the U.S. and the North, and easing military tensions. -North Korea summit in June.
The nuclear-armed North's chief delegate Ri Son-gwon responded in kind, calling it a "substantial fruit nourished by the people of the north and south".
"These actions are meant to stop the flow of illicit revenue to North Korea from overseas information technology workers disguising their true identities and hiding behind front companies, aliases and third-party nationals", said Treasury Secretary Steve Mnuchin in an official statement.
The park, once the most striking symbol of inter-Korean cooperation, has been closed since February 2016 when tension on the peninsula spiked after North Korea conducted its fourth nuclear test.
The resumption of the Kaesong park and other dormant inter-Korean cooperation projects aren't likely to happen anytime soon because US-led worldwide sanctions on North Korea remain in place.
Kaesong is where the Koreas' now-stalled jointly run factory complex is located.
South Korean President Moon Jae-in and North Korean leader Kim Jong-un will meet in Pyongyang next week, in their third summit.
Moon is also eager to mediate differences between Kim and U.S. President Donald Trump in order to bring the denuclearization process back on track.
The opening of the liaison office is a sign that even if talks between the North and the United States are not moving forward, the two Koreas seem determined to develop closer ties, says BBC Seoul correspondent Laura Bicker. He has also dismantled his nuclear and rocket-engine testing sites.
Moon and South Korean delegation will fly directly to Pyongyang using the Western air route, Moon's office said, adding that an advance team will take the land route to Pyongyang Sunday for preparations. Mr. Moon said he will focus on facilitating talks between the United States and North Korea and finding ways to ease a military standoff along the Koreas' heavily fortified border.
South Korea has said it hopes the liaison office will help in those efforts. It said the live coverage will include key moments such as when the leaders greet each other in Pyongyang on Tuesday.
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