South Korea and Japan have agreed on the thorny issue on how to use the fund Tokyo will provide Seoul to compensate victims of sexual enslavement during the colonial occupation era, a Japanese media report said Friday.

The two countries' foreign ministers will hold telephone talks later in the day to confirm the agreement and officially announce it, Kyodo News said.

To put an end to the decades-old diplomatic row over the wartime atrocity committed during the colonial period (1910-45), the neighbors forged a landmark deal in December. In the agreement, Japan conceded and apologized for the historical misdeed and committed to pay 1 billion yen ($9.9 million) to be used in projects aimed at healing the scars of victims, euphemistically called comfort women.

In a follow-up measure, a South Korean government-registered foundation was launched late last month to execute the projects, but the funds have yet to be transferred to the foundation, due to differences between the countries over details of its purposes.

Up to 200,000 women, mostly Koreans, were enslaved at front-line brothels for the imperial Japanese troops in the first half of the 20th century.

Out of hundreds that have come forward to say they were victims, only 40 survivors are still alive in South Korea. (Yonhap)