South Korea has reached a landmark agreement with the United States to extend the reach of Seoul's ballistic missiles by more than twice the current limit to counter the threat from North Korea, the government said.

Sunday’s move to significantly boost the South's missile capabilities is likely to rattle North Korea which has remained at odds since the 1950-53 Korean War left the peninsula divided.

It may also stoke concern in China, Japan and Russia, parts of which would be within range of the new missiles.

Under the agreement, South Korea can develop missiles up to a range of 800 km from the current ceiling of 300 km, Chun Young-woo, top secretary to President Lee Myung-bak for foreign and security affairs, told reporters.

Under the new deal South Korea can develop missiles up to a range of 800 km from the current ceiling of 300 km

He said the United States and South Korea also agreed to maintain the maximum payload for a South Korean-developed ballistic missile at the current level of 500 kilograms.

However, if Seoul chose to develop a missile with shorter ranges, it could increase the payload accordingly.

Seoul has for years sought to extend its missile range to deter the North, which it said had developed missiles that could reach every corner of the country.

"The most important goal for our government to revise the missile guidelines is deterring North Korea's military provocations," Chun said.

Currently, all of South Korea as well as US military installations in Japan and Guam, are within the range of North Korean missile attacks, according to South Korean government data.

In April, North Korea was condemned by the UN Security Council after a failed long-range rocket launch.

US allies including South Korea deemed it a disguised test for the North to upgrade its ballistic missile technology despite Pyongyang's claim that it was aimed to put a satellite into orbit for peaceful purpose.

Washington had sought to discourage South Korea from developing longer-range ballistic missiles in keeping with a voluntary international arms-control pact known as the Missile Technology Control Regime (MTCR).