The two countries have been discussing North Korea's involvement at the border village of Panmunjom.
The decision follows the North's participation in the Olympics, widely seen as successful piece of diplomacy which brought a hint of rapprochement.
However, countries like the US and Japan remain wary of nuclear-armed North Korea's intentions.
It will be the first North Korean delegation to attend a Winter Paralympics.
Only two athletes, both para skiers, have been invited to take part in the Games, which will be held from 9-18 March.
But North Korea last month agreed that it would send a 150-strong delegation, including cheerleaders and support staff.