South Korea's Unification Ministry confirmed that it received a message from the Red Cross that North Korean officials changed their position after refusing earlier this month to take back the 27 fishermen.
South Korean officials, who said four of the fishermen wished to remain in South Korea, were ready at the border village of Panmunjom to release the 27 others. But North Korean officials wouldn't open their side of the border.
Pyongyang later said all 31 must be returned, claiming the four not returning were being held against their wishes.
But in the latest statement, North Korea will take 27 fishermen back out of concern for "the feelings of the family members who are waiting for them," the Red Cross said.
No date has been set and the exchange may take place at sea instead of at Panmunjom.
The village is the usual place for transferring people between North and South Korea, still technically at war since a 1953 cease-fire was signed. It also is the village where government officials, diplomats and military personnel from each side meet for discussions on humanitarian, economic and defense issues.
The fishermen -- 11 men and 20 women -- have been held by South Korea since early February. A South Korean coast guard vessel picked up their ship that had drifted into South Korean waters near Yeonpyeong Island in the Yellow Sea and around 7 miles from North Korean shores.
The coast guard towed the vessel to the South Korean port of Incheon.
South Korean officials at first said none of the people on board indicated they wanted to defect to the south. However, South Korea said four later requested to stay, which prompted a harsh response from Pyongyang.
The exchange of fishermen who have strayed inadvertently across the international boundary is a common diplomatic process for the two countries that carefully monitor their disputed maritime boundaries.
Tensions between the two Koreas increased this month when Seoul suspected North Korea of trying to jam South Korean military equipment, including Global Positioning Systems, during major military exercises by the South Korean and U.S. troops. An official investigation has been launched by South Korean authorities.
South and North Korea regularly call for talks to ease diplomatic and military tensions.
But the first military talks between the two countries since North Korea shelled South Korea's Yeonpyeong Island in November broke down last month. Pyongyang refused to apologize for the incident that killed two South Korean marines and two civilians and injured at least 20 people.
However, North Korea's uranium enrichment activities could be part of the stalled nuclear talks when they resume, Pyongyang told visiting Russian Deputy Foreign Minister Alexei Borodavkin.
An unidentified North Korean foreign ministry spokesman said his country was ready to rejoin the so-called six-party talks "without any precondition" to which Borodavkin is Russia's top envoy, Yonhap News Agency reported.
Talks on denuclearizing the Korean peninsula among the two Koreas, China, Japan, Russia and the United States have been stalled since 2008.