Peace after the Korean War, which started in 1950, was never officially declared despite an armistice agreement being signed in July 1953.
But South Korean President Moon Jae-in, 68, said he hopes an end of war declaration will help Seoul and Pyongyang recommence previously stalled talks.
He also suggested it could kickstart talks between North Korea and the United States.
Mr Moon made the comments during a press conference with Australian Prime Minister Scott Morrison, 53, in Canberra.
The pair also announced a new quarantine-free travel agreement between Australia, South Korea and Japan which will start on Wednesday.
But Australia and South Korea also signed a defence deal reportedly worth £1billion.
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