SEOUL--South Korea set the stage for a major row with Japan by announcing its intention to dissolve a foundation set up to assist wartime "comfort women" that was the centerpiece of a landmark deal to resolve the thorny issue.

The plan, conveyed by South Korea’s Vice Foreign Minister Cho Hyun to his Japanese counterpart, Takeo Akiba, during talks in Tokyo on Oct. 25, threatens to derail a 2015 bilateral agreement that was hailed as a “final, irreversible resolution” of an issue that had dogged ties between the two countries.

Japan has reacted strongly to the move to disband the Reconciliation and Healing Foundation that was established with 1 billion yen ($8.9 million) in funding from Japan, according to sources in the governments of both countries.

The entity was established in July 2016 to help the lives of women forced to provide sex to wartime Japanese soldiers.

The Korean Peninsula was under Japanese colonial rule from 1910 to 1945.

Cho said scrapping the foundation could not be averted as it was was no longer functioning, according to the sources.

Akiba expressed strong concern about the plan, saying it will have grave consequences for Japan-South Korea relations.

It is not clear if South Korea presented the news as an ultimatum.

An official announcement is expected shortly.

In Seoul, Jin Sun-mee, the minister of gender equality and family, indicated that the South Korean government will announce the future of the foundation in early November.

“We have already finished coordinating with concerned parties over how to translate our decision into action and are now discussing the timing and the way of making it public,” she said Oct. 24.

Prime Minister Lee Nak-yeon said in a National Assembly session in August that the government is set to “decide by the year-end.”

These developments follow an announcement by a South Korean government review panel earlier this year that the 2015 agreement was insufficient. The pact was struck when Park Geun-hye, President Moon Jae-in’s predecessor, was in office.

Moon met with the victims and their supporters to hear their input. Strident calls were made by former comfort women and civic groups for an alternative to the Japan-South Korea agreement.

In July, South Korea’s Cabinet approved the injection of 10.3 billion won, the equivalent of 1 billion yen, to the foundation by the Ministry of Gender Equality and Family, a gesture to effectively offset Japan’s contribution to the foundation.

Scrapping the foundation would raise the issue of what to do with the Japanese funding, including whether to return it.

Seoul has stated it will not seek to renegotiate the bilateral agreement with Tokyo.

It is leaning toward possible talks with Japan over ways to use Japan’s contribution so that it can argue that scrapping the foundation does not amount to abandoning the agreement, the sources said.