South Korea will pay for North Korea's Winter Olympics expenses and has agreed to fork out $2.64 million to cover the costs incurred for accommodation, food and transportation of delegate members, ABC News reported.
The South and North Exchange and Cooperation Promotion Council reached the agreement on Wednesday, with government funds going toward footing the bills racked up by 424 North Korean cheering squad members, taekwondo performers, orchestra musicians and journalists.
The group of supporters and performers traveled to Pyeongchang, South Korea, despite ongoing international nuclear tensions, according to BBC News.
The South Korean government extended an invitation to North Korea to join the Games in an effort to diminish some of the tension, and on Wednesday, South Korea's Unification Minister Cho Myoung-gyon said the North's participation was a step toward building peace on the Korean Peninsula.
"The Olympics have become a chance for the North to communicate with the international community," he said, according to USA Today. "This could further pave the way for discussion to build and sustain peace on the peninsula."
A separate budget has been set up to cover the costs of hosting North Korea's high-level official delegation, which included North Korean leader Kim Jong Un's sister, CNBC noted.
The International Olympics Committee will be responsible for allocating funds to pay for the 22 North Korean athletes who are also in South Korea.
Kim Jong Un praised South Korea for its efforts, noting that it was important to nurture the "warm climate of reconciliation and dialogue," CNN said.
Meanwhile in Washington, senior figures including U.S. Vice President Mike Pence said Pyongyang was using the Olympics for propaganda purposes.
This is not the first time South Korea has footed the bill for the North.
In 2002 it covered the costs for more than 600 North Koreans visiting the South during the 2002 Asian Games in Busan, BBC News said.