Any kind of agreement between the two rivals is rare and in the past unpredictable North Korea has withdrawn permission for the event at the last minute.
A meeting of officials from North and South Korea agreed the reunions will take place later this month, just north of the border, South Korea's Unification Ministry said.
At previous reunions, about 100 families have been allowed to meet relatives on the other side for fleeting moments before they are sent back to their respective homes.
Officially North Korea has not linked the reunions with its demand for the cancellation of annual military exercises by the US and South Korean militaries scheduled to begin this month.
But officials in the South say the intention is clear and Seoul will not fall in line.
The North's offer to allow the family reunions has been welcomed both by its sole major ally, China, and the US who were also on opposing sides in the Korean War. Successful particpants are chosen by lottery.