SEOUL - South Korea is set to announce a new air defence zone to include remote spots within overlapping exclusive economic zone with China, the Yonhap News Agency reported on Monday, citing top presidential officials.

"The zone has been conceptually finalised," a senior official told the agency, requesting anonymity due to sensitivity of the issue. "The government will announce the plan after carefully reviewing the military operation and aviation safety as well as the international regulations."

Seoul will inform China, Japan and the United States of the decision rather than negotiating with them first, according to The Cholsun Ilbo.

The latest move came after China's recent declaration of an Air Defence Identification Zone (ADIZ) over the East China Sea and demanded all overflying foreign aircraft to identify themselves to Chinese authorities.

China's zone, which overlaps those of South Korea and Japan, covers the submerged reef of Ieo island, where waters are controlled by Seoul, said The Cholsun Ilbo.

"The government is preparing the air defence zone in a way that best suits national interests," defence ministry spokesman Kim Min Seok said in a briefing, without elaborating on details of the draft.

It is believed the draft will allow Seoul to expand its ADIZ, set up in 1951, to cover the islands of Marado and Hongdo as well as Ieodo Ocean Research Station. The station is built on top of a submerged rock formation within the overlapping exclusive economic zone with Beijing, Yonhap reported.

The draft, expected to be finalised after a senior officials' meeting on Tuesday, is set to escalate tensions between South Korea and its neighbours.

"The foreign affairs and security officials should come up with an answer after making a strategy. It is not smart to hastily bring in a measure to handle the hot-button issue," security research Yang Wook was quoted by Yonhap as saying. "It is like emotionally jumping into a mud fight."