Red Velvet will perform "Red Flavor" and "Bad Boy" on April 1, and there will also be a joint concert with North Korean performers on April 3.
Still, some South Korean performers were evidently deemed too risqué.
Kim followed up by agreeing to a summit with the South's President Moon Jae-in, and reportedly to another with US President Donald Trump.
Two other high-level North Korean officials, Kim's sister Kim Yo Jong and nominal head of state Kim Yong Nam, also attended the performance, the report said.
After Red Velvet was invited to perform at a concert in Pyongyang, their agency SM Entertainment did their best to make sure that all the group's members would participate.
The performances will be the first by South Korean artists in the North since 2005, when Cho Yong-pil had a solo concert in the North's capital.
According to the South's Yonhap News Agency, Kim said inter-Korean cultural events should be held more often and suggested another event in Seoul this autumn. Riding on the momentum, North Korea is set to hold talks with the USA on denuclearization before the end of May.
The same South Korean singers will hold a joint concert with North Korean performers on Tuesday at the Ryukyung Chung Ju Yung Gymnasium, a joint project between the North and South named after Hyundai Group billionaire founder Chung Ju-yung who had long advocated inter-Korean cultural and economic exchange.
Athletes from North and South Korea marched under a unified peninsula flag at the opening ceremony at the Pyongchang Winter Olympics in February and the significant thaw in the inter-Korean relations has led them to set a date for their first summit in more than a decade on April 27. As a result, the singer will not take part in the concert.
One of the most closely watched acts was Red Velvet, part of the South's hugely popular K-pop phenomenon that has taken audiences in Asia and beyond by storm in recent decades.
'Unfortunately, she will not be able to attend the concert'.
In another sign of eased tensions, annual US-South Korean military exercises which got under way in the South Sunday will last for just one month compared to some two months normally.
South Korean girl band Red Velvet is seen after their performance in Pyongyang, North Korea, Sunday, April 1, 2018.
In an interview with Billboard in 2013, the 68-year-old singer was dubbed a "K-pop legend".
Another famous singer, Choi Jin-hee, also performed for the fourth time in the North and sang Maze of Love - a hit in both Koreas and another of the late Kim's favourites.
The audiences for the concerts will consist mostly of elite, loyal cadres unlikely to undergo a sudden ideological conversion under the influence of a few K-pop stars.