McCormack said North Korea was now expected to follow through with its pledge to shut down and seal its reactor.
 
The funds, which North Korea has promised to use for "humanitarian purposes", had been a sticking point in talks aimed at curtailing North Korea's nuclear programme.
 
North Korea had refused to implement an agreement, reached four months after North Korea tested a nuclear device, to shut its Yongbyon nuclear reactor in return for fuel and other aid until it received the $25m in funds.
 
Washington lifted its objections to releasing the funds last month, but the money remained blocked due to what US and Chinese officials called "technical complications". Consequently, the US missed a 30-day deadline set by North Korea to have the funds released.
 
The money was frozen in the Banco Delta Asia (BDA) in Macau, after Washington blacklisted the bank for allegedly helping North Korea to launder money.
 
The bank has denied any wrongdoing.
 
If North Korea follows through with its promises, it would be the first moves Pyongyang has made to scale back its nuclear development since 2003, when it kicked out international inspectors and restarted its sole operating nuclear reactor.
 
The International Atomic Energy Agency, the UN's nuclear watchdog, is to monitor and verify the reactor's shutdown, in what would be the organisation's first visit to North Korea since late 2002.
 
Technical difficulties
 
In the first phase of the six-country agreement - reached in talks between North and South Korea, Japan, Russia, China and the US - North Korea is expected to shut down its reactor by Saturday, in exchange for a shipment of fuel oil.
 
McCormack said that with only four days remaining to the deadline, there could be technical difficulties in shutting down the reactor, indicating that Washington would allow some flexibility in dealing with the 60-day deadline agreed in February.
 
"You're bumping up against the technical ability to do that [shut down the reactor] safely," he said. "We'll see where we are at on Saturday."