Bach, speaking at the opening of the IOC's 132nd Session in the South Korean coastal city of Gangneung which will host the sliding and skating events at the Feb. 9-25 Games, praised both governments for choosing to harness the Olympic spirit.
"The Olympic spirit has brought two sides together that for too long were divided by mistrust and animosity. The Olympic spirit has brought real hope for a brighter future for everyone on the Korean Peninsula," Bach said.
While the Olympics had opened the door to opportunity for talks between the two Koreas, Bach said it was important to see the process through.
"This initiative gives all parties the chance to reflect on what the future could look like, if we were all guided by this Olympic spirit," he added.
"But Korea’s journey does not end here. The political tensions will not disappear overnight. Sport cannot create peace, but the Olympic Games can open the way with powerful symbols."
The talks between Koreas on the Olympics have brought some respite from the standoff over Pyongyang's nuclear and missile programmes.
North Korea are sending 22 athletes to compete in Pyeongchang, including 12 ice hockey players who will form a joint team with the South.
It will mark the first time the two Koreas will compete as a unified team at the Olympics but the decision has been met with anger from some South Korean athletes, while an online petition against the move garnered tens of thousands of signatories.
South Korean President Moon Jae-in said the atmosphere on the peninsula had brightened significantly thanks to the approaching Olympic festival of sport.
"One or two months ago, many countries worried over safety at the Pyeongchang Olympics," Moon said.
"For many, North Korea participating in the Olympics or a peaceful Olympics where North and South Korea forming a unified team seemed impossible.
"However, those worries have disappeared and what seemed impossible is now a reality."
Hopes that the Olympics could prove a springboard to serious dialogue between the two Koreas during the Games received a boost earlier on Monday with news that North Korea's ceremonial leader is to make an unprecedented visit to South Korea this week.
North Korea's official KCNA news agency confirmed that Kim Yong Nam would attend the Pyeongchang Olympics' opening ceremony on Friday.
(Additional reporting by Christine Kim in Seoul, Editing by Ed Osmond)
