"But we have been reviewing an option of either skipping the exercise or sending fewer soldiers or weapons", one military official said as quoted by Yonhap news agency.
According to another official, the military has presented its opinion to the country's Defense Ministry, which will make a decision in the near future.
The exercise in question is the 39th Cobra Gold exercise, organized by the US and Thai armed forces, and set to take place on 26 February - 6 March.
At the moment, the number of confirmed cases in South Korea is 24.
The new and unknown type of pneumonia was first detected in the Chinese city of Wuhan in late December, prompting China to take drastic quarantine and precautionary measures.
It has since spread within China and to more than 25 countries, with 780 confirmed deaths in China's Hubei province alone and over 34,000 infected worldwide.