North Korea had earlier in the day announced the channel would be reopened. The South's Ministry of Unification then announced that officials from the North had called using the hotline at the shared border village of Panmunjom on Wednesday afternoon. Officials first tested the line and held a conversation for about 20 minutes, it said, according to news agencies.
The announcement follows Kim Jong Un's offer on Monday to open a dialogue with South Korea over the North's participation in the Winter Olympics, which begin Feb. 9.
South Korea responded by proposing talks as early as next Tuesday in Panmunjom, which straddles the heavily fortified demilitarized zone between the two Koreas. The reopening of the hotline is meant to establish arrangements for this formal dialogue.
"The restoration of the hotline is very significant," said South Korea's chief presidential press secretary, Yoon Young-chan, according to news agencies. "It creates an environment where communication will be possible at all times," he added.
Ri Son Gwon, chairman of North Korea's Committee for the Peaceful Reunification of the Fatherland, said his country hoped the Winter Olympics would be a success.
"We will try to keep close communications with the South Korean side from a sincere stand and honest attitude, true to the intention of our supreme leadership, and deal with the practical matters related to the dispatch of our delegation," he said, according to the North's official KCNA news agency.
China urged both sides to use the Winter Olympics as an opportunity to improve ties.
"We believe all relevant parties in this issue should seize this positive turn of events in the situation on the peninsula," foreign ministry spokesman Geng Shuang said at a daily news conference Wednesday. "China would like to play a constructive and positive role in bringing this situation back to the right track of peaceful settlement, work for the denuclearization of the peninsula and long-term peace and stability on the peninsula."
However, there is no guarantee that talks would find common ground between the two sides, nor lead to any lasting upturn in ties. Experts warned that North Korea was most likely resorting to a tactic that it has used before, making insincere promises in hopes of getting sanctions eased while buying time for its nuclear program.
U.S. officials said they were skeptical that Kim would make good on his offer, and insisted that the North will not drive a wedge between Washington and Seoul.
In an indication of the possible hurdles that lay ahead, South Korea's prime minister, Lee Nak-yon, warned Tuesday that North Korea could demand "different treatment," apparently as a nuclear power, if the talks do take place.
North Korea has refused to pick up the hotline since 2016 in retaliation for the closure of an industrial complex jointly operated by the two sides that provided much-needed revenue for the North. Relations have deteriorated as North Korea has accelerated its nuclear and missile program with frequent tests.
Meanwhile, the U.S. ambassador to the United Nations, Nikki Haley, said on Tuesday that the United States is hearing reports that North Korea might be preparing for another missile test, warning that such action would necessitate tougher steps against Pyongyang.
In a New Year's Day speech, Kim said he wanted to ease tensions with the South but also told the Trump administration that a "nuclear button" was on his desk and that his missiles could strike any part of the United States.
Trump responded with a threat of his own Tuesday evening.
"Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!" he wrote on Twitter.
Asked about Trump's comments, China's Geng urged "all the relevant parties" to exercise restraint and do more to ease tensions on the peninsula.
Amber Ziye Wang in Beijing contributed to this report.