Kim You-geun, a national security official at Seoul's presidential Blue House, confirmed the accord, known as GSOMIA, would not be allowed to lapse at midnight.

"The Japanese government has expressed their understanding," he said.

Seoul and Tokyo are both major US allies, democracies and market economies faced with an overbearing China and the wayward North.

But their relationship continues to be heavily affected by Japan's colonial rule of the Korean peninsula from 1910 to 1945.

The latest manifestation of their dispute over wartime history has escalated into a conflict over trade in the wake of South Korean court rulings against Japanese companies.

Seoul announced in August it would terminate the General Security of Military Agreement (GSOMIA) -- which enables the two US allies to directly share military secrets, particularly over Pyongyang's nuclear capacity. It had been due to expire at midnight.

The United States had frequently urged its two main allies in the region to bury the hatchet, stressing that the only countries to benefit from the row were North Korea and China.

The suspension of the expiry date comes on the condition that GSOMIA can still "be terminated at any time," said Kim.