South Korea has announced a plan to compensate Korean victims of Japan's wartime forced labor in a bid to resolve the long-disputed issue and improve ties with Japan.

At a press conference on Monday, foreign minister Park Jin said the Foundation for Victims of Forced Mobilization by Imperial Japan under the interior ministry will pay the compensation to the victims and their bereaved families.

Around four billion won, or some three million U.S. dollars, will be paid to 15 victims named as plaintiffs in 2018 Supreme Court rulings that ordered two Japanese companies, Nippon Steel and Mitsubishi Heavy Industries, to make the payments.

The minister said the fund will be created through donations from the private sector. Although he didn't elaborate, contributions are expected from South Korean companies that benefited from a 1965 treaty normalizing diplomatic relations under which Japan provided economic aid and loans.

While the two Japanese firms are not expected to take part as Tokyo maintains that all colonial-era reparation issues were settled in the 1965 deal, Seoul has left the door open to voluntary participation by other Japanese companies.

South Korea also plans to further reinforce and expand initiatives to memorialize the victims and to educate future generations about wartime atrocities.

The ministry, which assessed the latest plan to be a reflection of the country's desire for a resolution and elevated national status, said it will explain follow-up measures to the victims and their families while continuing to seek their unanimous approval.