Australia says pressure must remain on North Korea to denuclearise, but remains wary of leader Kim Jong-un's commitment to disarm as he offered to meet US President Donald Trump.
The May meeting between the leaders would be the first US-North Korea summit, marking a potentially dramatic breakthrough in the nuclear stand-off.
While Foreign Minister Julie Bishop supports dialogue with North Korea, she urged the rogue nation to enter talks in good faith.
"North Korea has a history of making agreements and then failing to honour them," she said.
President Kim committed to denuclearisation and to suspending nuclear or missile tests, South Korea's National Security Office head Chung Eui-yong told reporters at the White House.
White House spokeswoman Sarah Sanders said Mr Trump "will accept the invitation to meet with Kim Jong-un at a place and time to be determined".
Mr Trump tweeted later: "Great progress being made but sanctions will remain until an agreement is reached."
Liberal frontbencher Christopher Pyne said the more talking the leaders did the better.
"(But) it's critical that the pressure remain on North Korea to denuclearise the Korean peninsula, so the sanctions ... stay in place," he told Sky News on Friday.
Labor's foreign affairs spokeswoman Penny Wong said a meeting between the leaders would attract a lot of attention, but the international community could not "step back one inch" on North Korea.
"I think the world has learnt over many years regrettably, that it is very difficult to trust assurances given by the North Korean regime," she said.
"It's always better to talk than to not talk, but as (Prime Minister Malcolm) Turnbull has said, as Labor has said, it must always be with the recognition that we don't step back one inch from the demands that the international community is making."
A senior White House official told reporters the meeting was a result of Mr Trump's decision to maximise pressure on North Korea.
"That meant maximising economic pressure. It meant isolating North Korea diplomatically," the official told reporters.
The location of the meeting has not yet been decided.
The official said President Kim was the only person who could make decisions in his authoritarian system, so it made sense to speak directly to him "instead of repeating the long slog of the past".
Australian Associated Press