Military authorities of the two countries "shared the understanding" on the postponement of the Vigilant Ace air exercise that usually takes place around December, Yonhap News Agency quoted the source as saying, adding that a final decision would be made when the two countries hold annual defense ministers talks later this month.
"Instead, the two sides are considering conducting their own air drills in December," he added.
Seoul and Washington have cancelled several combined exercises since last year amid peace efforts involving North Korea to avoid provoking Pyongyang with maneuvers it has condemned as a rehearsal for a war of invasion.
Launched in 2015 under the name of Pen-ORE (Peninsula Operational Readiness Exercise), Vigilant Ace drill was held annually until 2017 by mobilizing a large fleet of aircraft from the allies.
During the 2017 exercise, the allies mobilized around 270 aircraft, including radar-evading fighter jets such as F-22s, F-35As and F-35Bs in a show of force against North Korea, which had launched a series of nuclear and missile provocations.
"The suspension of the exercise will be one of the items defence ministers from the two countries will discuss during their planned meeting in mid-November," another source added.
Efforts to denuclearize the Korean Peninsula have been underway, though negotiations between the US and North Korea on the latter's nuclear weapons programme have not made much progress for months.
( With inputs from IANS )