Seoul said on Thursday that it would spend about 34 billion won ($36.4 million) until 2010 to explore and manage fisheries and mineral resources in waters around the islets, called Dokdo in Korean and Takeshima in Japanese.
They lie roughly halfway between the two countries, and are controlled by South Korea.
Kang Moo-hyun, the vice-minister of maritime affairs and fisheries, said Dokdo was "clearly our territory and a precious natural heritage".
"We need to give opportunities to both current and future generations to equally use Dokdo and share the benefits."
The plan, part of a law enacted last year, is aimed at "strengthening [South Korea's] effective control over Dokdo", the maritime ministry said in a statement.
The islets are at the centre of a long-running dispute between Seoul and Tokyo, which flared anew last month when Japan said it would conduct a maritime survey in waters near the islets.
The area is a rich fishing ground believed also to have deposits of methane hydrate, a potential natural gas source.
South Korean protesters burning
a Japan war-time rising sun flag
South Korea said on Thursday that it would conduct studies on fisheries as well as mineral resources in the area.
The country will also bolster monitoring of the ecosystem on and around the islets and upgrade facilities on the islets, where a 30-strong police detachment is stationed, the ministry said.
Roh Moo-hyun, the South Korean president, has promised to defend the islets at all costs, following the latest spat between Seoul and Tokyo over their rival territorial claims.
The Korean Peninsula was under Japan's colonial rule from 1910-45.