The decision comes days after the conclusion of US President Donald Trump's second summit with North Korean leader Kim Jong Un in Hanoi, which ended without a formal agreement but with both sides suggesting they would keep talking.

Trump has ruled out withdrawing any of the 28,500 US forces based in South Korea to defend it from its nuclear-armed neighbour, which invaded in 1950.

Any such drawdown would face strong pushback from the US Congress and Japan, whose conservative government is deeply wary of North Korea's intentions.

But the US president has complained repeatedly over the cost of the military drills, which Pyongyang has always condemned as provocative rehearsals for invasion.

During a Saturday phone call between South Korean Defence Minister Jeong Kyeong-doo and his US counterpart Patrick Shanahan, "both sides decided to conclude the Key Resolve and Foal Eagle series of exercises," according to a Pentagon statement.

Foal Eagle is the biggest of the regular joint exercises held by the allies, and has always infuriated Pyongyang.

In the past, it has involved 200,000 South Korean forces and some 30,000 US soldiers.

It is accompanied by Key Resolve, a computer-simulated war game conducted by military commanders which usually begins in March and runs for about 10 days.

The two allies will instead carry out "adjusted outside manoeuvre trainings and united command exercises to continue firm military readiness", Seoul's defence ministry said Sunday.

The decision was reached to support ongoing diplomatic efforts for North Korea's denuclearisation and ease military tensions with the North, it added.

- Combat readiness -

Opponents of scrapping the drills have warned that it could impact the combat readiness of the combined US and South Korean forces and hand the North a strategic advantage on the divided peninsula, but most analysts said such concerns were exaggerated.

"Suspending or downgrading the US-South Korean drills may hurt the readiness of the two militaries, but I don't think it's going to be a serious security threat to South Korea," Ahn Chan-il, the president of the World Institute for North Korea Studies in Seoul, told AFP.

"The South's conventional forces outclass the North's, and given the current situation (with the US and the existing sanctions), it's highly unlikely that Pyongyang will do anything with its nuclear weapons in the foreseeable future," he added.

Washington has sought to end long-running tensions on the peninsula and encourage North Korea to scrap its nuclear programme.

Since Trump's first summit with Kim last year in Singapore, in which both leaders signed a vaguely-worded commitment to denuclearisation of the Korean peninsula, the US and Seoul have scaled back or scrapped several joint military drills, and US bombers are no longer flying over South Korea.

"Not downgrading or suspending the drills at this point... would mean the involved countries are not serious" about reaching a denuclearisation accord, said University of North Korean Studies professor Yang Moo-jin.