A ministry official said trading mainly among local municipalities will be done online next year, and from 2011 at Korea Exchange, the country's bourse.
The ministry has not yet decided its price for emissions per ton, she said.
A statement released from the ministry said the scheme will provide a base for the country's voluntary 2020 emissions reduction target.
South Korea has pledged to cut emissions by 30 percent from its forecast under a "business as usual" scenario.
"The scheme is designed to meet the country's mid-term emission reduction target and connect with international carbon markets," the statement said.
South Korea, one of the world's fastest growing polluters, said in August it hopes to become Asia's trading hub for carbon emission certificates and related products under its plan for a new carbon exchange from 2011.