Kim Yo-jong is the youngest daughter of late leader Kim Jong-il and her role was strengthened last year when she was promoted to the politburo.
Both Koreas will march under one flag at the opening ceremony.
The North's participation has been seen as a thawing of bilateral ties.
However, experts say it is unlikely to have any impact on the North's nuclear ambitions.
Kim Yo-jong, who shares the same mother as Kim Jong-un, will accompany the North's ceremonial head of state, Kim Yong-nam, whose attendance was announced at the weekend.
Most of the 280-member North Korean delegation, including a team of cheerleaders, arrived in the South on Wednesday.
The delegation, led by North Korean Sports Minister Kim Il-guk, includes 229 cheerleaders, four officials from the National Olympic Committee, 26 taekwondo demonstrators and 21 journalists.
The team arrived via a western border at 09:28 local time (00:26 GMT), the Yonhap news agency reported.
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