The government decided Monday to spend 1.95 billion won ($1.76 million) to transform a guard post on the border with North Korea into a museum underscoring inter-Korean reconciliation efforts and honoring soldiers killed during the Korean War.

The guard post at Arrowhead Ridge inside the Demilitarized Zone (DMZ) has since been used as a place to display items unearthed from the former battlefield under a project to uncover remains of soldiers killed in the 1950-53 war.

On Monday, a civilian-government committee on inter-Korean exchanges decided to remodel the outdated guard post into a museum to honor fallen soldiers and help people better understand the need for peace and reconciliation on the Korean Peninsula, the unification ministry said.

Artifacts found on Arrowhead Ridge belonging to late service members will also be on display.

The museum was planned as part of efforts to follow an inter-Korean agreement on joint excavation and to push ahead with the vision of turning the DMZ into a peace zone, the ministry said.

Under a bilateral military accord signed on Sept. 19, 2018, the two Koreas agreed to launch a joint excavation project on Arrowhead Ridge, one of the fiercest battlefields during the war. But the South has carried out the project alone since last year, as the North did not respond to calls for joint work.

Unification Minister Lee In-young stressed the importance of fulfilling the agreement and urged the North "once again to come forward to the path for dialogue and cooperation" in improving inter-Korean relations.

"The Korean Peninsula appears to have entered a great point of inflection in politics after the recent US presidential elections," Lee said while presiding over the committee meeting.

"The government will push ahead to use this period of transition as an opportunity to make groundbreaking progress in inter-Korean relations," he added.

The committee also decided to spend over 1.3 billion won ($1.19 million) for efforts to reconnect a railway section in the South for the Gyeongwon Line, a train route between Seoul and North Korea's eastern coastal city of Wonsan.

The budget will be used for costs including maintenance and supervision fees, the ministry said.

The restoration project for the South's section of the Gyeongwon Line was halted in May 2016 amid heightened tensions after Pyongyang's nuclear test and missile launch earlier that year.

The DMZ, which is about 250 km long and 4 km wide, is one of the world's most heavily fortified borders, with the rival Koreas technically in a state of conflict, as the 1950-53 Korean War ended in a truce, not a peace treaty.(Yonhap)