A signing ceremony will be held at 4:15 pm (0715 GMT) in Seoul, a South Korean foreign ministry official said without revealing contents of the deal.
Yonhap news agency quoted diplomatic sources as saying that under the agreement South Korea would be allowed to increase peaceful nuclear activity.
Talks began in October 2010 on revising the 1974 pact which banned South Korea from reprocessing spent fuel for fear of proliferation because it could yield plutonium, a key ingredient in building atomic bombs.
South Korea has strongly pushed for U.S. permission to recycle spent fuel for power generation, saying its storage facilities for spent fuel will reach capacity in 2016.
U.S. officials have expressed concern
...meaning the brow was mildly wrinkled, the eyebrows drawn slightly together, and a thoughtful expression assumed, not that anything was actually done or indeed that any thought was actually expended...
that such a move might undermine global nonproliferation efforts and provoke
North Korea and Japan.As a solution, South Korea proposed "pyroprocessing", a new technology considered less conducive to producing weapons as it leaves separated plutonium mixed with safer fissile materials.
The two allies have already conducted a joint research into the process, but it was not clear whether the revised pact would reflect the results of their research.
South Korea relies on 23 nuclear reactors to meet about 30 percent of its annual power needs.
It has sought to become a leading exporter of nuclear power plants since it won a $20 billion deal in 2009 to build nuclear reactors in the United Arab Emirates.