South Korea and the United States reached a final pact of their free trade agreement (FTA) on Monday after 10-month-long tough negotiations.

"The historic agreement between South Korea and the United States will promote economic growth and development in both of our countries," said South Korean Trade Minister Kim Hyun-chong at a joint news conference with Deputy U.S. Trade Representative Karan Bhataia Monday afternoon in Seoul.

The FTA is a "mutually beneficiary win-win agreement," Kim said.

Bhatia said at the news conference that he was proud of the deal, adding the deal marks "an important new chapter for half- decade economic relationships between the two allies."

"It's an agreement for the 21st century and a strong deal for both Korea and the U.S.," he said.

Under the agreement, nearly 90 percent of the tariffs between the two nations on industrial goods will immediately be lifted, while the remaining tariffs will be phased out over three to 15 years, South Korea's chief negotiator Kim Jong-hoon told reporters.

Following the conclusion of the FTA, South Korean President Roh Moo-hyun highly commended the deal, describing it as a "stepping stone for another economic leap forward in the nation's push to join the ranks of advanced countries."

Monday's FTA deal was reached minutes before the U.S.-set deadline ran out. The deal needs to be approved by the parliament of both South Korea and the United States before taking effect.

The FTA deal is expected to knock down tariff and non-tariff barriers between the United States, the world's largest economy, and South Korea, the world's 10th-largest economy. In 2006, trade volume between the two sides was recorded at 74 billion U.S. dollars and local economists estimated the trade volume will increase 20 percent after the FTA takes effect.

South Korea and the United States launched their FTA talks in June last year.