South Korea will scrap an intelligence-sharing pact with Japan amid an intensifying dispute over history and trade, South Korea's presidential office said on Thursday.

The decision was made after a meeting of the presidential National Security Council. The deal was due to be automatically renewed on Saturday, unless either side decided to cancel it.

Japan created a "grave change" in the environment for bilateral security cooperation by removing South Korea's fast-track export status, said Kim You-geun, a deputy director of the National Security Council.