The proposal was made on Tuesday when delegations from both countries held talks at the border village of Panmunjom and acknowledged Saturday by North Korea's representative to the International Olympic Committee, Chang Ung.
After their first formal discussions in more than two years, both countries agreed on Tuesday that the North would participate in the games and to hold military talks to improve relations.
The agreements were reached at high-level inter-Korean talks held Tuesday in Panmunjom, the so-called "peace village" straddling the border where the 1953 armistice that ended the fighting in the Korean War was signed.
The neighboring countries are expected have further discussions about the proposal at Panmunjom on Monday after agreeing on Saturday to hold working-level discussions on the North Korean side of the peace village.
Separately, the IOC has suggested a meeting be held on January 20 at its Switzerland headquarters to discuss the North's participation in the Games, which will be held February 9-25 in Pyeongchang, South Korea.