The plan was disclosed by chief executive officer Carl-Henric Svanberg at a meeting in Stockholm with South Korean President Lee Myung-Bak on Sunday, Lee’s office said in a statement released in Seoul.
Ericsson will establish a research centre in South Korea to develop environmentally-friendly and fourth-generation telecommunications technologies with firms in the Asian country under the plan, it said.
The Swedish firm will also increase the number of employees at its South Korean unit from 80 to about 1,000, it said.
President Lee hailed the planned investment as helping the two countries lead the information and communications technology market, it added.
Ericsson is a world leader in high-speed wireless technology using the long-term evolution, or LTE, standard.
South Korea is one of the world’s most wired countries and a developer of high-speed Wireless Broadband (WiBro) technology.
Lee has been on a three-day visit to Sweden since Saturday.