The current agreement with the United States limits South Korean ballistic missiles to a range of 300 kilometers, the Yonhap news agency said.
However, Seoul is seeking to extend that range so its missiles cover all of North Korea.
"At this stage, I can't confirm details of the negotiations but I can confirm the negotiations reached the final stage," South Korean Foreign Minister Kim Sung-hwan told lawmakers during an annual parliamentary audit.
"The government is engaging in negotiations with the U.S. with a focus on increasing our capability to cope with North Korea's missile threats," Kim said. "Last-minute consultations are under way and I will report to the National Assembly as soon as we reach an agreement with the U.S. side."