The eight-member delegation will be led by Kim Yong Chol, head of the North Korean ruling party's United Front Department, and is expected to arrive on Sunday for a three-day visit, the agency reported.
"The government thinks the delegation's dispatch will help improve inter-Korean relations and bring peace to the Korean Peninsula, including the North's denuclearization. In that sense, Seoul will accept their visit," the ministry was quoted as saying by the media outlet.
The delegation, which also includes Ri Son Gwon, the head of North Korean agency responsible for inter-Korean relations, will likely meet with South Korean President Moon Jae-in at the closing ceremony.
"We believe President Moon will naturally meet the (North Korean) delegation at the closing ceremony," a spokesman for the South Korean presidential office was quoted as saying.
Following the report, South Korea's Liberty Korea Party (LKP) expressed its fierce protest against the possible visit of the senior North Korean official believed to have orchestrated two deadly attacks against the South in 2010.
"President Moon Jae-in should make a choice between having Kim Yong-chol kneel before our people and never allowing the main culprit of the Cheonan's sinking to set his foot even an inch on the land of the Republic of Korea," Jun Hee-kyung, a Liberty Korea Party spokesperson, was quoted by the Yonhap news agency.
According to the media outlet, the spokesperson also characterized the possible visit as a humiliation for Seoul and accused Moon of attempting to "curry favor" with Pyongyang.
The opening ceremony on February 9 was attended by North Korean ceremonial head of state Kim Yong Nam as well as Kim Jong Un's younger sister Kim Yo Jong.
In January, Seoul and Pyongyang resumed bilateral talks after North Korean leader Kin Jong-Un ordered to restore a hotline prior to the Pyeongchang Winter Olympics.
The two sides agreed that the national teams would march together under a "unification flag" at the opening ceremony.
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The thaw on the Korean Peninsula followed a year of escalating tensions caused by the Pyongyang's missile and nuclear tests carried out in violation of the UN Security Council's resolutions.
Following the tests, the UN Security Council introduced several rounds of sanctions, with the latest unanimously adopted last December. The sanctions limited North Korea's oil dealings to 4 billion barrels per year and made oil exporters working with the country report on their deliveries to the UN Security Council.
Pyongyang rejects the new sanctions, saying that the country's nuclear weapons are a self-defense deterrence against nuclear threats and blackmail by the US.