Lee accepted Kim's resignation and a new defense chief will be announced Friday, presidential chief of staff Yim Tae-hee said.
Lee is vowing to increase troop strength on the island where four were killed in this week's shelling.
South Korea and the U.S. have reaffirmed plans for joint military maneuvers in the Yellow Sea that will include a U.S. aircraft carrier. They begin on Sunday.
The Associated Press contributed to this story.