The soldier killed five comrades in a grenade and gun attack and injured seven more, and has been tracked down by troops to a school close to the North Korean border.
He carried out his attack late on Saturday night, throwing a grenade and opening fire in the base at Goseong county, a mountainous region bordering the North on the eastern coast of the peninsula.
A manhunt was started at dawn in the heavily forested hillsides involving helicopters and special forces soldiers that numbered the equivalent of nine battalions.
‘Shoot to kill’
The soldier opened fire on the troops when he was discovered, wounding a platoon leader in the arm, according to a local TV report.
Troops have been order to “shoot to kill” unless the soldier surrenders, said local reports.
The parents of the soldier were taken to the site, where his mother pleaded with him to surrender as a stand-off developed after the initial burst of gunfire, according to Yonhap news agency.
A military official identified the soldier as Sergeant Lim, who was due to be discharged on 16 September.
He described Mr Lim as an “introvert” and said there had been earlier concerns over his psychological health, but he was deemed fit to be deployed to the outpost after passing a test in November.
The military has been previously criticised for lax discipline in some units and failure to prevent previous cases where soldiers shot their comrades after suffering personal problems.
In a similar incident in 2011, a South Korean marine went on a shooting spree at a base near the tense border with North Korea, killing four fellow soldiers before trying to blow himself up with a hand grenade.