The new bureau will be the first permanent text and photo office operated by a Western news organisation in the North Korean capital. It follows the opening of an AP television office in the city five years ago.
Run by a notoriously secretive regime, North Korea also has a poor press freedom record. It is ranked 177 out of 178 countries on the Reporters Without Borders press freedom index.
Under the new agreement, AP will have exclusive global distribution of video content from the KCNA archive. The agreement has been negotiated over the past few months, with KCNA president Kim leading a delegation of executives to AP's New York headquarters.
In March, chief executive Tom Curley and executive editor Kathleen Carroll were part of a delegation that traveled to Pyongyang.
Curley heralded the agreement as "historic and significant".
"AP is once again being trusted to open a door to better understanding between a nation and the world. We are grateful for this opportunity and look forward to providing coverage for AP’s global audience in our usually reliable and insightful way."
A 2008 appearance by the New York Philharmonic in Pyongyang saw a record number of US journalists allowed to enter North Korea, with 80 granted access, under strict direction, to cover the concert.
Caroll told the Huffington Post that the agency's news coverage would not be affected by state influence.
"The AP operates independently, regardless of location. Period."
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