Speaking at the inauguration ceremony in Seoul, Mr Yoon said the doors for dialogue will remain open between the Koreas to resolve the nuclear threat.
The 61-year-old won a tight election in March, less than a year after entering politics as a member of the conservative People Power Party.
His offer comes at a time when the North has escalated its weapon launches in an attempt to provoke the United States and its allies into negotiations over sanctions imposed on Pyongyang.
Although the new president has held a hard-line approach towards the North, including warning of a pre-emptive strike in the face of an imminent attack, Tuesday’s speech is being seen as his willingness to reopen talks amid reports of Kim Jong-un preparing to revive Pyongyang’s nuclear test site.
Mr Yoon could face a security crisis just days into his office if the North carries out its first nuclear test in five years as early as this month, as the US has warned.
“While North Korea’s nuclear weapon programs are a threat not only to our security and that of Northeast Asia, the door to dialogue will remain open so that we can peacefully resolve this threat,” Mr Yoon said.
“If North Korea genuinely embarks on a process to complete denuclearisation, we are prepared to work with the international community to present an audacious plan that will vastly strengthen North Korea’s economy and improve the quality of life for its people,” he added, without elaborating on the economic plan.
Kim Sung-han, Mr Yoon’s national security adviser had said in February that his team would devise a roadmap in which Pyongyang would be offered economic aid for denuclearisation measures.
Former president Moon Jae-in in his farewell speech on Monday called for efforts to restore peace and denuclearisation on the Korean Peninsula.
“Peace is the condition for our survival and prosperity. I heartily hope that efforts to resume dialogue between South and North Korea and establish denuclearisation and peace would continue,” Mr Moon said in the televised speech.
During his election campaign, Mr Yoon had accused the liberal president of tilting towards the North and China while exploiting ties with Japan. He had vowed to abandon Mr Moon’s “appeasement policy” toward North Korea and strengthen ties with the United States and Japan.