The deal, which requires legislative approval in both countries, is the biggest for the United States since the North American Free Trade Agreement signed in 1992 and ratified in 1993. It is the biggest ever for South Korea.
Steve Norton, a spokesman for the Office of the U.S. Trade Representative, told The Associated Press that details would be provided in a briefing later.
The two countries started negotiations last June in Washington, alternating meeting sites between the two countries. Both sides strongly advocated a deal, saying it would boost trade and economic growth in the two countries, which already do more than $75 billion in trade a year.
Differences over trade in automobiles, agriculture, textiles and other issues, including the status of South Korean goods manufactured at a small enclave in North Korea, had thrown up obstacles.
In the final round of talks in Seoul, South Korean Trade Minister Kim Hyun-chong and Deputy U.S. Trade Representative Karan Bhatia and their subordinates held eight days of marathon talks, sometimes going all night, to finally clinch the deal.
The two sides had exceeded self-imposed deadlines twice since Saturday and it was unclear whether they would be able to finish in time or reach an agreement at all.
The negotiators were under pressure because President George W. Bush must notify Congress that he plans to sign a trade agreement 90 days before his special Trade Promotion Authority expires July 1, meaning the agreement had to be concluded by the beginning of April.
That so-called "fast track" authority allows Congress to ratify or reject, but not modify, trade deals negotiated by the White House.
Originally, the U.S. said a deal needed to be wrapped by March 31, but on Saturday U.S. officials said the deadline was April 1 in the United States.
Shortly after midnight Monday in Washington, the White House released the text of a letter from Bush to congressional leaders, dated April 1, stating his intention to enter into a free trade agreement with South Korea.
He said the agreement "will generate export opportunities for U.S. farmers, ranchers, manufacturers, and service suppliers, promote economic growth and the creation of better paying jobs in the United States, and help American consumers save money while offering them greater choices."
"The agreement will also further enhance the strong United States-Korea partnership, which has served as a force for stability and prosperity in Asia," he said.
But South Korean labor and farm groups have denounced the deal, saying an influx of U.S. imports will cost jobs and harm livelihoods.
A protester set himself on fire Sunday shouting "Stop the Korea-U.S. FTA" outside the hotel where negotiators were meeting. He was being treated for third-degree burns, police said.