The United States has welcomed South Korea's announcement of its plan to resolve the long-disputed issue of compensation for Korean victims of Japan's wartime forced labor.

U.S. State Department Press Secretary Ned Price said on Monday that the U.S. welcomes the "historic" announcement, saying that bilateral discussions between South Korea and Japan to resolve sensitive historical issues have concluded.

Price said that the U.S. encourages Seoul and Tokyo to build steps to advance bilateral relations.

Price also stressed the importance of trilateral cooperation of the U.S., South Korea and Japan, saying that the three-way relationship is crucial to a common vision of a free and open Indo-Pacific.

Earlier on Monday, the Seoul government announced that the country would compensate the victims through an existing public foundation funded by domestic firms instead of direct payment from liable Japanese companies.

U.S. President Joe Biden hailed announcements by Seoul and Tokyo, calling them “a groundbreaking new chapter of cooperation and partnership between two of the U.S.' closest allies.”