South Korea's Unification Ministry will undergo significant restructuring and downsizing, after President Yoon Suk Yeol urged for a structural shake-up amid the prolonged deadlock in inter-Korean relations.

Under the guidance of the presidential office, Vice Unification Minister Moon Seoung-hyun, who assumed office early this month, has been at the forefront of reorganizing internal divisions as well as affiliated agencies responsible for inter-Korean dialogue and exchanges, The Korea Herald learned Sunday.

The Kaesong Industrial District Foundation and the South-North Korea Exchanges and Cooperation Support Association under the auspices of the Unification Ministry are the primary targets of the reshuffle. In June, the Unification Ministry directed these two affiliated agencies to devise measures to reduce their budgets for the next year and undergo a rigorous restructuring, a senior official confirmed this month during a closed-door briefing.

The Yoon government is also considering abolishing the Kaesong Industrial District Foundation, The Korea Herald has learned. The foundation is responsible for overseeing South Korean companies that were previously operating in the Kaesong Industrial Complex, which has been closed by North Korea since February 2016.

The other targets of the reshuffle include the Inter-Korean Cooperation District Policy Planning Directorate within the Unification Ministry and other affiliated agencies, such as the Office of the Inter-Korean Dialogue and the Inter-Korean Transit Office.

A more defined reform plan is anticipated to be revealed once Kim Yung-ho, the nominee for the unification minister position, is officially appointed.

Earlier this month, Yoon criticized the Unification Ministry, saying, "Until now, the Ministry of Unification has played a role of a support department for North Korea," and calling for a major restructuring. His denunciation came following the unconventional and simultaneous appointments of a hard-liner on Pyongyang as the minister and a seasoned diplomat as the vice minister.

The liberal Hankyoreh newspaper on Friday reported that the presidential office ordered the Unification Ministry to reduce its staff by 150 personnel, which accounts for around 25 percent of the current workforce of approximately 610 to 620 people.

The downsizing would bring the size of the ministry to a similar scale as it was during the early days of the conservative Lee Myung-bak administration, which initially attempted to abolish the Unification Ministry but retracted the plan due to domestic opposition.

But during a parliamentary hearing on Friday, Unification Minister nominee Kim -- who served as the presidential secretary of unification affairs during Lee's term -- refuted the media report and reiterated that he "did not believe the report is true."

The Unification Ministry on Friday said it is "conducting an internal review to operate its organizations more efficiently, considering the prolonged stalemate in inter-Korean relations." But the ministry also clarified that "there are no specific details" and decisions have not yet been finalized.

The Yoon government aims to restructure the Unification Ministry with a focus on analyzing the Kim Jong-un regime, addressing human rights issues in North Korea and facilitating the resettlement of North Korean defectors.

As part of this restructuring effort, the Unification Ministry announced in March its plan to abolish a secretariat that was established to support the inter-Korean liaison office. Instead, its functions have been integrated into the Office of Inter-Korean Dialogue. Additionally, the bureau in charge of human rights and humanitarian affairs has been elevated to the status of an office, while the office responsible for inter-Korean exchange and cooperation has been downsized and reorganized as a bureau.