The rare defection took place as a joint naval exercise, which included three American aircraft carriers and seven South Korean warships, was being carried out in waters off South Korea's east coast.
North and South Korea are technically still at war, since the conflict between them ended in 1953 with a truce and not a formal peace treaty.
Three US Navy aircraft carriers put on show of strength in the Western Pacific Ocean over the weekend, the first time three of the 100,000-ton behemoths have sailed together in a decade.
South Korea's Joint Chiefs of Staff (JCS) said the soldier was shot by North Korean troops as he fled across the Military Demarcation Line from the northern side of Panmunjeom at 3:31 p.m. Monday.
"But our military is keeping a full readiness posture against the possibility of North Korea's provocations", a military official said in a briefing. These exercises were conducted when strike force groups were sent to the seventh Fleet region of operations from the west coast of the U.S. are joined with the strike force group from Japan.
It marks the first massive joint drills since Seoul and Washington agreed last month to enhance rotational deployments of United States strategic assets to curb North Korea's nuclear and missile threats.
But Pyongyang doesn't seem interested in negotating. All three "reaffirmed their commitment to maintaining maximum pressure on North Korea in an effort to denuclearize the Korean Peninsula", the White House said.
As part of his continuing tour of Asia, Trump met with Japanese Prime Minister Shinzo Abe and Australian Prime Minister Malcolm Turnbull Monday in Manila to discuss the situation in North Korea.
The president responded sarcastically in a tweet Saturday, writing, "Why would Kim Jong-un insult me by calling me 'old, ' when I would NEVER call him 'short and fat?' Oh well, I try so hard to be his friend - and maybe someday that will happen!"