Japan's cabinet approved a plan to remove South Korea from its trade "white list" on Friday.

"The government at a cabinet meeting today approved a revision to the export control law ... South Korea, the only Asian nation on the list, will be removed," Japan's Trade Minister Hiroshige Seko told reporters.

South Korea is now the first country ever to be dropped from Japan's so-called "white" list of nations granted minimal constraints on exports of products that could be diverted to military use.

It means hundreds of products listed as sensitive will be subject to tighter export controls, though experts said the effect would be more symbolic than economic.  

The measure, which is expected to take effect later this month, comes after Tokyo last month tightened the rules on exports of three products key to South Korea's chip and smartphone industries, raising fears for global supply in the sectors.

South Korean President Moon Jae-in will chair an unscheduled Cabinet meeting later on Friday to discuss the issue, according to Moon's office.

South Korea-Japan talks

On Thursday, South Korea called for Japan to allow more time for diplomacy as talks on their most serious dispute in years failed to make progress.

South Korea warned that if Japan were to drop it from its so-called white list of countries that enjoy minimum trade restrictions, there could be sweeping repercussions, including damage to bilateral security cooperation.

Relations between Japan and South Korea, plagued by bitterness over Japan's 1910-1945 occupation of the Korean Peninsula, are arguably at their lowest since they normalized ties in 1965.

Read more: Seoul warns of security impact if dropped from Tokyo's list

South Korean Foreign Minister Kang Kyung-wha held talks with her Japanese counterpart, Taro Kono, on the sidelines of a Southeast Asian conference in Bangkok on Thursday. 

It was the highest-level meeting since Japan tightened curbs last month on exports to South Korea of high-tech materials, accusing its neighbor of inadequate management of sensitive items. 

The 55-minute talks began with a frosty greeting. Both Kang and Kono appeared stone-faced as they shook hands, and Kang focused on reviewing documents she brought before making opening remarks, shunning eye contact. 

The talks yielded little progress, with a South Korean foreign ministry official saying there was "virtually no change" in Japan's stance. 

South Korean officials have also warned they may reconsider an intelligence sharing accord with Japan if the feud worsens.

The bilateral accord, known as the General Security of Military Information Agreement (GSOMIA), is automatically renewed every August. It is chiefly aimed at countering the Democratic People's Republic of Korea's (DPRK) nuclear and missile threats. 

"As Japan cited security reasons for its trade restrictions, I said we will have no option but to review the various elements that form the framework of security cooperation with Japan," Kang told reporters, when asked whether South Korea would keep the GSOMIA if it was dropped from the Japanese list.

(With input from agencies.)