South Korean Deputy Unification Minister Chun Hae-sung said North Korea had accepted the South's request to send athletes to the Games, which open on Feb. 9 in PyeongChang some 50 miles from the border with the North.
The sensitive discussions, held in the border town of Panmunjom, were closed to outside observers.
In opening remarks before the meeting, Cho Myoung-gyon, South Korea's unification minister, referred to the massive protests that led to the ouster of former President Park Geun-hye, saying: "We have experienced power of the people and we have [an] understanding that inter-Korean relations should be aimed at reconciliation and peace."
"We have high expectations that the Olympics turn out to be a peace festival with special guests from the North," he said.
Cho's North Korean counterpart, Ri Son Gwon, added that he was optimistic about the talks as long as their "innocent intention and cooperation are united."
The talks lasted a little over an hour, deputy minister Chun said, with additional meetings planned for the afternoon. The two sides are now holding discussions over the release of a joint statement.
In the past, talks have not gone smoothly.
Duyeon Kim, a visiting senior research fellow at the Korean Peninsula Future Forum, a think tank in Seoul, said previous summits were plagued by posturing and "nitpicking."
"It's clear that the North is focused on the atmospherics and the PR aspects of these talks this time," she said. "The big question will be what actions North Korea shows after the Winter Olympics. How and will Kim Jong Un prove he is serious about inter-Korean relations?"
The South may already be laying the groundwork to allow North Korean leader Kim to show he's sincere about improving ties.
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For the North, he said, this included sending a sizable entourage — a high-level delegation, a performing arts group, athletes, cheerleading teams, media and others — to the upcoming Games.
Seoul brought up the issue of families separated by the Korean War in 1950-53 and ways to ease military tensions, Chun added. The family reunions, he suggested, could fall around the Lunar New Year holiday next month.
Only hours after the U.S. and South Korea decided last Thursday to suspend military exercises during the Olympics, North Korea notified the South via fax that it agreed to join talks.
"When the ancient Greeks used to hold the Olympics, they held a truce," said Moon Chung-in, a special adviser on foreign affairs and national security to South Korea's President Moon Jae-in. "We are living in a civilized world. It is the logical choice."
With the Olympics only weeks away, the participation of North Korean athletes also requires agreement from the International Olympic Committee in Geneva, as North Korea missed a key deadline for registration.
The Associated Press, citing Japanese media, reported Sunday that a delegation from North Korea was en route to Geneva.
The IOC declined to confirm this when contacted by NBC News, although it did say it was considering allowing the North Koreans to participate.
Two North Korean figure skaters have qualified for the Games, and one issue that must be addressed during the negotiations is how they would travel to PyeongChang and where they would stay.
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More than half of South Koreans surveyed support helping to cover the expenses of the North Korean delegation, according to a poll taken last Friday and reported by South Korea's Yonhap News Agency.
Ahead of the Olympics, Seoul and Pyongyang are likely to keep the focus on Olympic issues, before touching on more sensitive topics like economic cooperation projects or military relations.
"For the South Korean president, he's staking his political future on inter-Korean reconciliation, and he wants to try to broker U.S.-North Korea talks," said Kim, of the Korean Peninsula Future Forum.
But for Pyongyang, the Olympics transcend relations with the South.
"For the North it would be an opportunity, an international platform, to raise its profile and its standing in the world," Kim added.
Kim Jong Un's goal in allowing his country to take part in the Games is to try to convince the world that North Korea is not a dangerous rogue state, she said.
The North Korean leader wants to show that his country is "a peace-loving, normal power and, 'by the way our nuclear weapons are only for peace — or only for self-defensive purposes,'" Duyeon Kim added.
However, the risk that the renewed dialogue will be undermined by actions seen as provocative by either party remains high, even before a thaw could lead to talks with other countries, such as the United States or China.
"The sooner talks with Americans get going at a high level, the better," said John Delury, an associate professor of East Asian studies at Yonsei University's Graduate School of International Studies.
North Korea hasn't engaged in negotiations over its nuclear program since the collapse of the "six-party" talks in 2009 involving North and South Korea, China, the U.S., Russia and Japan.
Those talks were aimed at getting North Korea to give up its nuclear weapons program, but Pyongyang pulled out after facing international criticism for testing a missile.