SEOUL, South Korea -- South Korea will spend $3 billion to buy land and move a sprawling U.S. military base from the capital, officials said Saturday.

The United States and South Korea agreed in June to relocate the 8th U.S. Army's 800-acre Yongsan Garrison, which now occupies prime real estate in central Seoul.

For the relocation, South Korea will start buying land early next year near Pyeongtaek and Osan, two towns 37 miles south of Seoul, the government said after a Cabinet meeting Saturday. The U.S. military already has an air base at Osan.

About the Yongsan area, Prime Minister Goh Kun said: "I hope the government will build a park that can be compared to New York's Central Park."

The relocation will be completed by 2006, officials said.

The United States keeps 37,000 troops in South Korea.

Seoul residents have complained that the 8th U.S. Army headquarters occupies prime real estate in bustling central Seoul. Younger South Koreans also see the foreign military presence in their capital as a slight to national pride.

Separately, North Korea lashed out Saturday at South Korea for staging a military parade, calling it a "political and military provocation."

About 6,300 South Korean troops paraded through downtown Seoul on Wednesday to mark their Armed Forces Day. South Korea holds such a parade once every five years.

Washington and its allies are urging North Korea to give up its nuclear programs. The North says it is using plutonium to build atomic bombs to deter what it calls a U.S. plan to "stifle" the North.