Japanese Foreign Minister Fumio Kishida said his government will give 1 billion yen ($8.3 million) to a fund to help those who suffered.
South Korean Foreign Minister Yun Byung-se said that as long as Tokyo sticks to its side of the deal, Seoul will consider the issue "irreversibly" resolved.
In addition, the two governments "will refrain from criticizing and blaming each other in the international society, including the United Nations," Yun said at a joint news conference Monday.
Kishida said Japanese Prime Minister Shinzo Abe
"expresses anew his most sincere apologies and remorse to all the women who underwent immeasurable and painful experiences and suffered incurable physical and psychological wounds as comfort women."
Abe later stated himself: "I think we did our duty for the current generation by reaching this final and irreversible resolution before the end of the 70th year since the war."
'A diplomatic humiliation'
But an advocacy group for former comfort women said the deal announced Monday is "a diplomatic humiliation."
"Although the Japanese government announced that it 'feels (its) responsibilities,' the statement lacks the acknowledgment of the fact that the colonial government and its military had committed a systematic crime," said the Korean Council for the Women Drafted for Military Sexual Slavery
. "The government had not just been simply involved but actively initiated the activities which were criminal and illegal."
The group took issue that it did not address the issue of Japanese history textbooks
glossing over the scope of the war crimes.
"Also, it is notable that the agreement did not specify anything on preventative initiatives such as truth seeking and history education," it said.
Japan helped establish the Asian Women's Fund in 1995, which is supported by private donors and provides assistance to former comfort women.
But up until now Tokyo had resisted direct compensation to the victims, prompting activists and former comfort women to say Japanese leaders were avoiding officially acknowledging what happened.
It's estimated that up to 200,000 women were forced to be sex slaves for Japanese soldiers in World War II, mainly Korean. Other women came from China, Taiwan and Indonesia.
The agreement stems from accelerated talks that began in November. Last month, Japan, South Korea and China announced they had 'completely restored' diplomatic relations
The three countries had not met for three years due to political tensions. South Korean President Park Guen-hye said at the time that "comfort women" was the "biggest stumbling block" to Seoul-Tokyo relations.
China's foreign ministry spokesman Lu Kang said the forced recruitment of the "comfort women" was a grave crime against humanity.
"The Chinese side always maintains that the Japanese side should face up to and reflect upon its history of aggression and properly deal with the relevant issue with a sense of responsibility."
China, which was also occupied by Japan prior to and during the World War II has long been critical of its neighbor's role in the war and its apparent lack of remorse for war crimes following defeat in 1945.
Only a few dozen of the women are still alive today.
S.J. Friedman, author of "Silenced No More: Voices of Comfort Women" said she doesn't believe this new agreement, even with direct compensation, will close a chapter on Japan's wartime sexual slavery.
"I think this is just the beginning," she said.
"I've spoken to the comfort women survivors and they don't want the money. They want a sincere apology, the one that Willy Brandt gave at the Holocaust memorial. The Holocaust survivors said they were healed by that apology."
Japan, in the agreement, also asked South Korea to remove a statue symbolizing comfort women that sits outside the Japanese Embassy in Seoul.
"The activists are furious by the deal," Friedman continued. "The wording of the deal doesn't include the Japanese government systematically organized the military enslavement and the Japanese government wants the statue to be removed. I think it's insincere."
One comfort woman's story
Kim Bok-dong was a 14-year-old girl when the Japanese came to her village in Korea.
She said they told her she had no choice but to leave her home and family to support the war effort by working at a sewing factory.
"There was no option not to go," the 89-year-old woman told CNN's Will Ripley
this year. "If we didn't go, we'd be considered traitors."
But instead of going to a sewing factory, Kim said, she ended up in Japanese military brothels in half a dozen countries.
There, Kim said, she was locked up and ordered to perform acts no teenage girl -- or woman -- should be forced to do.
She described seemingly endless days of soldiers lined up outside the brothel, called a "comfort station."
"Our job was to revitalize the soldiers," she said. "On Saturdays, they would start lining up at noon. And it would last until 8 p.m."
Kim estimated each Japanese soldier took around three minutes. They usually kept their boots and leg wraps on, hurriedly finishing so the next soldier could have his turn. Kim says it was dehumanizing, exhausting and often excruciating.
"When it was over, I couldn't even get up. It went on for such a long time," she said. "By the time the sun went down, I couldn't use my lower body at all."
Kim believes the years of physical abuse took a permanent toll on her body.
"There are no words to describe my suffering," she said. "Even now. I can't live without medicine. I'm always in pain."