Pyongyang/Seoul, Jan 3 (IANS): North Korea on Wednesday opened its hotline to South Korea for the first time in almost two years, a major diplomatic breakthrough that could pave the way for future talks following a year of escalating hostility.

The North opened the dialogue channel at the shared border village of Panmunjom at 3 p.m., reports CNN

"By upholding a decision by the leadership, we will make close contact with South Korea in a sincere and faithful manner," Yonhap News Agency quoted Ri Son-gwon, the head of North Korea's agency handling inter-Korean affairs, as saying.

"We will discuss working-level issues over our potential dispatch of the delegation."

The announcement comes a day after Seoul proposed high-level inter-Korean talks on January 9 to discuss North Korea's possible participation in the PyeongChang Winter Olympics slated to be held from February 9 to 25, and ways to improve ties.

But Ri did not specify whether the country would accept Seoul's offer for the talks.

On New Year's Day, North Korean leader Kim Jong-un said that Pyongyang was willing to send a delegation to the Olympics in South Korea and is open to inter-Korean talks over the matter.

The North cut off two inter-Korean communication channels -- a hotline installed at the liaison office at the truce village and a military channel -- in February 2016 in protest of Seoul's shutdown of a joint industrial complex.

According to Ri, Kim "highly appreciated and welcomed" President Moon Jae-in's support of his peace offer.

"The leader stressed that whether inter-Korean ties can be improved totally depends on North and South Korea," the official said.

South Korea's Unification Ministry welcomed the North's restoration of the cross-border channel.

"We will consult with North Korea over working-level issues in connection to our dialogue offer through the hotline," the ministry added.