Defense Minister Kim Kwan-jin briefed President Park Geun-hye on the plan on Monday.
The heads of the South Korean and U.S. Joint Chiefs of Staff are to outline the plan when they meet in Washington this month for annual consultations. The new command structure will then be officially adopted at the bilateral Security Consultative Meeting in October.
The CFC was originally to be dismantled when the U.S. hands back wartime operational control of South Korean troops to Seoul in 2015, but there were fears here that this could weaken South Korea's defenses. The change of heart comes amid increasingly belligerent rhetoric from North Korea.