Multiple NBC reporters in contact with South Korean officials say they had no idea the exercises were part of the negotiations.
China on Tuesday praised the summit between US President Donald Trump and North Korean leader Kim Jong Un as historic and called for "full denuclearisation" to resolve tensions on the Korean peninsula.
"We don't know what type of person the North Korean leader is negotiating with. I think without Otto, this would not have happened", Trump said.
A spokeswoman for USA military forces in Korea, meanwhile, said it had not received any direction to cease joint military drills.
Following diplomatic meetings with North Korean dictator Kim Jong Un, President Donald Trump told Fox News' Sean Hannity that he believes the North Korean regime will begin working toward denuclearization "virtually immediately". Lawmakers sound alarm over "catastrophic" Yemen offensive Pentagon declines to acknowledge LGBT Pride Month for first time since "don't ask, don't tell" repeal Lawmakers circulate "urgent call" for Mattis to prevent "catastrophic" Yemen offensive MORE - who has stood firm on holding the exercises - was back in the United States as Trump made the announcement.
The wording recalls Seoul's reaction to Trump's initial cancellation of the summit with Kim two weeks ago, after North Korean officials lobbed personal insults at National Security Adviser John Bolton and Vice President Mike Pence. "Number two, I think it is something they really appreciated".
Photographs of the agreement signed by both leaders, who have now left Sentosa, reveal Kim Jong-un "reaffirmed his unwavering commitment" to denuclearisation adding the "world will see a major change". Trump described the exercises as "very provocative" and said Pyongyang "very much appreciated" seeing the exercises end.
"At the same time, there needs to be a peace mechanism for the peninsula, to resolve North Korea's reasonable security concerns", he added.
About 28,500 US troops are stationed in South Korea, a legacy of the Korean War, which ended in 1953 in an armistice that left the two Koreas technically still at war. The United States and the DPRK commit to recovering POW/MIA remains, including the immediate repatriation of those already identified.