Kim Jong-un has agreed to allow in global inspectors to observe the "permanent dismantling" of key missile facilities, according to Moon Jae-in, South Korea's president.
North Korean leader Kim Jong-un said he will also visit the South Korean capital of Seoul by the end of the year.
"Thanks to that meeting, the situation around the Korean Peninsula has stabilized, and we can now expect more progress", Kim said at the start of a two-hour meeting with Moon at the headquarters of the ruling Workers' Party, according to pool reports from South Korean journalists in Pyongyang.
"I don't think President Moon got everything he was seeking from these interactions, but Kim Jong Un gave Moon some tangible things for which he can take credit", said Michael Madden, an analyst at the Stimson Centre's 38 North think tank in Washington.
Seoul and Pyongyang have agreed to "cease various military exercises aimed at each other along the Military Demarcation Line (MDL)" after November 1.
Follow-up meetings between Secretary of State Mike Pompeo and North Korean officials failed to produce concrete results and Pyongyang quickly returned to its bombastic anti-American rhetoric.
Still, Moon's top security adviser, Chung Eui-yong, insisted the outcome of the latest inter-Korean summit will lead to a resumption of U.S.
In addition, the two leaders agreed that before the end of the year, they would participate in groundbreaking ceremonies to link railways along the east and west coasts of the Korean peninsula.
But the two Koreas have been pressing ahead with their own rapprochement, with Kim looking to secure economic cooperation from the far wealthier South, and Moon looking to reduce the risk of a US-North Korean conflict that would devastate his country.
It's been more than three months since Kim met US President Donald Trump in Singapore, and negotiations between the two sides appear to have hit an impasse.
Washington wants North Korea to outline the entirety of its nuclear program, and its response to Wednesday's joint statement from the Koreas remains to be seen.
Many here will wisely reserve judgment on whether the South Korean president's lofty claim to have removed "every threat" of war is correct - recent Korean history is littered with grand-sounding rhetoric that dissolved in the winds of the rivals' enmity - but if Moon and Kim can pull off what they've agreed to this week, there could be an outbreak of that rarest of feelings when it comes to inter-Korean ties: optimism.
The leaders of the two Koreas have been meeting in Pyongyang in an attempt to push forward their peace process, as well as advance dialogue with the United States.
"On the denuclearisation issue, the agreement fell short of expectations", Korea University political science professor Yoo Ho-yeol told AFP.
"The South and North agreed to actively participate jointly in global competitions including the 2020 Summer Olympics and to cooperate in bidding for the South-North joint hosting of the 2032 Summer Olympics", the statement said.