U.N. Secretary-General Ban Ki-moon welcomed Monday's landmark agreement between South Korea and Japan on resolving the issue of Japan's wartime sexual slavery, expressing hope for improved relations between the two countries.

"The secretary-general welcomes that the governments of Japan and the Republic of Korea have reached an agreement on the issues related to 'comfort women' at the bilateral Foreign Ministers meeting held in Seoul on 28 December," Ban's spokesman, Stephane Dujarric, said in a statement.

"The secretary-general hopes that the agreement will contribute to improving the bilateral relationship between the two countries," the spokesman said.

Ban also lauded President Park Geun-hye and Japanese Prime Minister Shinzo Abe "for their leadership and vision for the betterment of the relationship between the two countries as reflected in an earlier agreement at their first-ever bilateral summit in early November, the spokesman said.

"The secretary-general has stressed the importance of the countries in Northeast Asia to build the future oriented relationship, based on the recognition of history," he said.

Earlier in the day, South Korean Foreign Minister Yun Byung-se and his Japanese counterpart, Fumio Kishida, reached the agreement in talks in Seoul, which centers on Japan's admission of responsibility for the wartime crime and plans to pay reparations to the victims.

The deal removes the biggest thorn in relations between Seoul and Tokyo. (Yonhap)