The allies struggled to reach a breakthrough despite 10 rounds of talks since March, amid Trump's repeated calls for a sharp increase in South Korea's contribution.
The deal will officially go into effect after it receives parliamentary approval in South Korea, which is expected to take place in April, according to Yonhap news agency.
About 28,500 United States troops are stationed in South Korea, where the U.S. has maintained a military presence since the 1950-53 Korean War. Unlike past cost-sharing deals, which lasted multiple years, the new agreement would only be for one year, forcing negotiators to hammer out a new pact in the coming months, it added.
South Korea began paying for the USA military deployment in the early 1990s, after rebuilding its war-devastated economy.
The Stanford experts said it was their assessment that "North Korea can not deliver a nuclear warhead with any measure of confidence to the USA mainland", although Hecker said its nuclear weapons were a real threat to Japan and South Korea. The sum rises from the 960 billion won the Koreans contributed last year, but is far short of the $1.5 billion President Donald Trump demanded earlier this year, which caused consternation among local politicians.
But both sides worked to hammer out an agreement to minimise the impact on South Koreans working on US military bases, and focus on nuclear talks ahead of a second U.S.
The disagreement had raised the prospect that Trump could decide to withdraw at least some troops from South Korea, as he has in other countries like Syria.More news: Robert Whittaker out of UFC 234 title defense due to injury
Hong said South Korea is behind Malpass.
They said Trump might use the failed military cost-sharing negotiations as an excuse to pull back some of U.S. troops in South Korea, as a bargaining chip in talks with North Korean leader Kim Jong-un.
US Special Representative for North Korea Stephen Biegun held three days of talks in Pyongyang last week to prepare for the second summit, which he said would include discussion of such corresponding steps.
Ahead of the second US-North Korea leaders' summit, Malaysia's Prime Minister Tun Dr Mahathir Mohamad says Malaysia is ready to settle its problem with North Korea which followed the high-profile assassination of Kim Jong-nam, the half-brother of North Korean leader Kim Jong-un in Malaysia.
After the June meeting, Trump announced a halt to joint military exercises with South Korea, saying they were expensive and paid for mostly by the United States.
"That action would significantly undermine regional security and our ability to fulfill our treaty obligations to South Korea", said Reed, the top Democrat on the committee.
Most US troops were withdrawn in 1949 but they returned the next year to fight alongside South Korea in the 1950-53 Korean war.