President Yoon also said the outcome of a trilateral summit held at Camp David in the US last week will decrease risks and increase opportunities for South Korea.
The drill will include three aircraft and helicopter carriers sailing together in a show of force and undertaking joint drills.
A US-China summit could take place on the sidelines of the Asia-Pacific Economic Cooperation meeting Biden will host in San Francisco in November.
Bangladesh Prime Minister Sheikh Hasina and Indonesian President Joko Widodo are among 67 leaders from around the world invited to the summit.
The three leaders also said they would share real-time data on North Korea’s missile launches by setting up a hot line for crisis communications.
The summit of the grouping has given rise to high expectations, as it will be the first summit to be hosted in person since the emergence of the Covid-19 pandemic.
An analyst called Seoul’s move a departure from its passive stand on Indo-Pacific issues, and its intention to be more vocal as a “responsible stakeholder” in the region.
Negotiations are expected to be officially launched at the 23rd Asean Economic Community council meeting, and officially acknowledged in September.
White House Indo-Pacific coordinator Kurt Campbell said the hotline initiative will be part of efforts to boost cooperation to prepare for any crisis or contingency.
National Security Council spokesperson Jonathan Malaya also said the Chinese were also engaged in “cognitive warfare”, which involved artificial intelligence.