International Trade Secretary Liam Fox signed the deal with his South Korean counterpart Yoo Myung-hee in Seoul, BBC reported.
The preliminary agreement marks the first post-Brexit trade deal the UK has secured in Asia.
The agreement is roughly in line with the terms of the existing Korea-EU FTA.
"In so far as a (UK-S Korea) deal has been struck that's a landmark moment," Mouhammed Choukeir, the chief investment officer at private bank Kleinwort Hambros told 5 live.
"Where it's not a big deal is that actually the biggest trading bloc still needs to be negotiated — the EU and US."
The deal would cover South Korean exports including cars and auto parts. South Korea exports mostly cars and ships to Britain, while it imports crude oil, cars and whisky.
The agreement is designed to provide stability under a no-deal Brexit, with the UK due to leave the EU on October 31, with or without a deal.
Fox said, "The value of trade between the UK and Korea has more than doubled since the EU-Korea agreement was applied in 2011.
"Providing continuity in our trading relationship will allow businesses in the UK and Korea to keep trading without any additional barriers, which will help us further increase trade in the years ahead,"
"As we face growing global economic headwinds, our strong trading relationship will be crucial in driving economic growth and supporting jobs throughout the UK and Korea."
Both countries aim to ratify the deal by the end of October, and implement it in November.
"The deal is significant as it eased uncertainties sparked by Brexit, amid the already challenging environment for exports on the escalating trade row between Washington and Beijing," Yoo said.
South Korea — Asia's fourth largest economy — is a global leader in electronics, steel and auto industry.
The country's exports to the UK hit $6.36 billion (£5.0 billion) last year.
The UK is South Korea's second largest trading partner among EU members, and the Asian nation's 18th largest trading partner.
The UK is pushing to strike agreements with its trading partners as the Brexit deadline looms.
As a member of the EU, the UK is part of 40 trade deals which the EU has with other countries.
If the UK leaves the EU without a deal, it would fall out of these deals immediately, disrupting about 11 percent of UK total trade.
A priority for the government has been to get these countries to roll over their trade deals with the UK.
So far the UK has agreed ‘continuity’ deals with 12 countries and regions, including Israel, Norway and Iceland, Switzerland and Chile.