Japan and South Korea reached a deal on the issue of "comfort women" Monday, and the former announced it would offer 1 billion yen as restitution for the women through a fund that will be set up by Seoul. Comfort women is a term used to refer to those forced into prostitution by Japan's Imperial Army during the Second World War, and has been a contentious issue between Japan and its neighbours.

On Monday, Japanese Prime Minister Shinzo Abe apologized for the Japanese Imperial Army's actions that resulted in the enslavement of over hundreds of thousands of women, expressing "repentance from heart," South Korea's Yonhap News Agency reported.

The announcement came after Japanese Foreign Minister Fumio Kishida and South Korean Foreign Minister Yun Byung-se met on Monday in a major step forward for bilateral relations between the two nations, Kyodo news agency reported.

"The comfort women issue is an issue whereby many women under the then military's involvement bore deep scars to their honor and dignity, and from this perspective, the Japanese government acutely feels responsible," Kishida said at a press conference, adding the resolution on the "comfort women" issue would be "final, irreversible". 

"Prime Minister Abe, as prime minister of Japan, once again expresses an apology and repentance from the heart to all those who as comfort women experienced much pain and bore scars that are difficult to heal on their bodies and souls," the Japanese foreign minister said.

South Korean President Park Geun-hye will speak with Abe over phone on the deal reached on Monday, Yonhap said.

The two leaders are expected to meet in Washington in March 2016 following the positive outcome of the Seoul talks, according to The Japan Times

China has also responded to the historic deal, reportedly hoping that it will help thaw relations between Japan and South Korea, according to Kyodo.