The railway workers' union finally buckled to the government's ultimatum to return to work or face mass layoffs and ended its 22-day strike on Monday.
The government estimates damage caused by the strike at more than W1 trillion (US$1=W1,055) due to disruptions in supplies to various industries.
The strike was sparked by plans to end 114 years of state monopoly over the railway network and introduce an element of competition by establishing a subsidiary company for high-speed train services. But the government promised that this is not the attempt to privatize the railways.
It will immediately get to work to establish the subsidiary, which will begin operations in 2016 if all goes as planned.
Saenuri Party lawmaker Kim Moo-sung, Democratic Party lawmaker Park Ki-choon and other members of the National Assembly's Land and Transportation Committee at a press conference on Monday said labor and management have reached an agreement to end the strike on condition that a parliamentary subcommittee will study ways to promote the railway industry.
The subcommittee will be composed of eight ruling and opposition party lawmakers.
Kim Myung-hwan, head of the railway workers' union, said all of members will return to work by 11 a.m. Tuesday.
But a KORAIL spokesman said unionized workers would have to take a set amount of time off to ensure the safety of passengers, so it will take around a week before train operations return to normal. Staff also need to conduct safety checks on networks.
But the government said it will still hold those who took part in the illegal walkout accountable, which could include compensation lawsuits and disciplinary measures.