The government in Seoul has authorised the World Health Organization (WHO) to release $6.94m (£4.32m) to equip North Korean hospitals, the South’s unification ministry said.
The money was frozen in 2010 after Seoul accused Pyongyang of sinking its warship with the loss of 46 lives.
But in recent months there have been signs that tension is easing.
Representatives from both sides have met to discuss resuming nuclear disarmament talks, and there have been a number of informal visits.
South Korea donated a total of $13.12m to the WHO for North Korean humanitarian aid in 2009.
But in the wake of the warship sinking – and North Korean shelling of a border island later that year – Seoul withheld permission for the money to be released.
North Korea relies on humanitarian aid to feed its people, after years of famine in the late 1990s. Unicef says a fifth of all children in the impoverished country are malnourished. (BBC)