Myanmar President Thein Sein agreed Tuesday with his South Korean counterpart Lee Myung-Bak to negotiate an investment guarantee pact, during talks which focused on economic ties.
The two leaders signed a framework agreement on aid for Myanmar and agreed to strengthen cooperation in energy and resources development, infrastructure and construction, Lee's office said in a statement.
They also pledged cooperation in gas development and power plant projects in Myanmar.
Last week a South Korean consortium signed a deal to build a 500,000-kilowatt power plant and electricity transmission networks by 2015 in Yangon's Tharkayta township.
Myanmar -- formerly known as Burma -- has been emerging from international isolation with sweeping democratic reforms since Thein Sein came to power after decades of military rule.
The reforms have made Myanmar an attractive destination for investment. It has one of the world's largest natural gas reserves and big deposits of iron ore, zinc, nickel and other minerals.
Thein Sein arrived Monday for a three-day state visit that will include a tour of military-related companies on Wednesday.
In May Lee became the first South Korean president to visit Myanmar since a North Korean attempt to assassinate one of his predecessors in Yangon in 1983.
Then-president Chun Doo-Hwan narrowly escaped a bomb attack by North Korean agents that left 17 South Koreans dead.
Myanmar had close ties with North Korea for decades. But during his visit Lee secured an undertaking from Thein Sein that his government would refrain from further weapons purchases from Pyongyang.