South Korea will launch a foundation this week aimed at compensating Korean women who were forcefully conscripted by Japan more than seven decades ago, a move which the neighbors hope will lay to rest a long-running diplomatic feud, Seoul's foreign ministry said Wednesday.

The foundation, named Reconciliation and Healing, will set sail on Thursday to financially compensate the wartime victims and restore their dignity with 1 billion yen ($9.5 million) contributed by Japan, according to the Ministry of Foreign Affairs.

The launch follows the deal reached by the foreign ministers of South Korea and Japan on Dec. 28 to end the diplomatic row once and for all. Under the deal, Japan expressed an apology for its colonial-era atrocities and committed to providing the fund for the foundation. The island nation had ruled over the Korean Peninsula from 1910 to 1945.

Up to 200,000 women, mostly from Korea, were enslaved to serve in front-line brothels for Japanese troops during World War II, according to historians.

Only a small number of them have come forward as victims of the sexual servitude, and there are only 40 confirmed South Korean victims alive today.

The focus of the foundation will be on financially benefiting the surviving victims and carrying out commemorative works for the sexually enslaved women, who have been euphemistically known as comfort women.

Headed by Kim Tae-hyun, an honorary social welfare professor at Sungshin Women's University, the foundation in Seoul is scheduled to open for business starting Thursday, the foreign ministry said.

Despite the launch, however, controversies are expected to linger over the foundation.

The Korean Council for the Women Drafted for Military Sexual Slavery by Japan, a vocal support group for comfort women, is challenging the foundation's representativeness. The group denounced the South Korea-Japan government deal as lacking Japan's official acknowledgment of liability and prior consultation with the victims.

How smoothly Japan would transfer the committed fund is another issue, with some observers speculating that it could be delayed because of the two countries' unsettled matter of whether to keep a bronze statue of a seated girl symbolizing comfort women in front of the Japanese Embassy in South Korea.

Seoul has said that the statue was set up by local civic groups and it has no authority to remove it.  (Yonhap)