South Korea has agreed to give North Korea 500,000 metric tons of rice to avert a food crisis.
The UN has warned its N Korean food stocks are running low
The move was announced by the South Korean unification ministry after bilateral talks, which also aimed to improve economic ties.
It came four days after Pyongyang said it would rejoin six-party talks on ending its nuclear weapons programmes.
Diplomatic efforts linked to the issue are gathering pace, with China's top envoy going to North Korea on Tuesday.
US Secretary of State Condoleezza Rice has also held talks on North Korea with Japanese leaders in Tokyo, before she goes to Seoul later on Tuesday.
Ms Rice backed Tokyo's efforts to resolve the cases of Japanese citizens kidnapped during the Cold War by North Korean agents.
But she said the most important issue at the six-nation talks would be how to end North Korea's pursuit of nuclear weapons.
"The nuclear issue is the one that is pressing us as we return to the talks," she said.
Plagued by shortages
Diplomats hope that they can use the prospect of more aid to impoverished North Korea as leverage in the nuclear talks.
The UN's World Food Programme raised the alarm about food shortages in the North earlier this year - saying there was a cereals gap up to October 2005 of 900,000 tons - but the South Korean donation will help to alleviate that.
"The South side agreed to offer 500,000 tons of rice in a loan to the North side in brotherly love and humanitarianism," South Korean unification ministry spokesman Kim Hong-je said.
South Korea is one of the largest single donors of aid to the secretive communist state.
It is the South's biggest donation to the North since 2000.
However, South Korea has repeatedly stated that full-scale aid as well as commercial exchanges are impossible as long as the nuclear issue is not resolved.
The US last month pledged 50,000 tons of food aid, which it called a "humanitarian act based on need".
The UN World Food Programme is currently feeding some 6.5m North Koreans - nearly a third of the population.