The South's Unification Ministry said the Kaesong complex, which lies six miles (10km) over the border in North Korea, will open on a trial basis on Monday.

The agreement came at a second round of talks between a newly created Kaesong joint committee that began on Tuesday morning and stretched through the night.

Established in 2004 as a rare symbol of inter-Korean co-operation, Kaesong had come through a number of crises on the Korean peninsula unscathed.

It combined South Korean initiative, capital and technology with cheap North Korean labour.

But in April, as tensions escalated following the North's third nuclear test, Pyongyang effectively shut down operations by withdrawing the 53,000 North Korean workers employed at the 123 South Korean plants.

Protesters demanded the reopening of the complex in August

The two Koreas agreed last month to work together to resume operations at the zone, which is an important source of hard currency for the cash-strapped regime in Pyongyang.

As part of the deal, the North accepted the South's demand that Kaesong be opened to foreign investors - a move seen by Seoul as a guarantee against the North shutting the complex down again in the future.

The agreement included plans to host a roadshow for foreign investors at Kaesong in October.

In August Seoul announced it would start paying a total of $251.2m (£163m) in compensation to around 100 South Korean firms locked out of the site for months.