A KC-330 military transport plane carrying the South Koreans departed from Tel Aviv early Saturday (local time) and is expected to land at Seoul Air Base in Seongnam, just south of Seoul, later at night, the ministry said.
The plane is also bringing 51 Japanese and six Singaporean nationals, as part of Seoul's efforts to provide humanitarian cooperation, the ministry added.
The plane left for Israel the previous day.
It marks the first such transportation of South Koreans by a military plane and the second flight to bring South Koreans home from Israel following the return of 192 people aboard a Korean Air plane Wednesday.
The government decided to dispatch the military plane as air carriers increasingly suspended flight operations to and from Ben Gurion International Airport in Tel Aviv amid the intensifying conflict, officials said.
Of the 163 people on board, 82 were short-term travelers, while the rest were residents.
About 470 South Koreans remain in Israel. Most of them are residents living there long-term and have chosen to stay behind of their own accord, a foreign ministry official said, adding the diplomatic mission there continues to advise them to leave the area for safety.
Roughly 630 South Koreans had been staying in Israel before the military plane took the people aboard.
No South Korean casualties have been reported since the conflict began.
A rapid response team consisting of foreign ministry officials also boarded the military plane to assist with the transportation, the ministry said.
Source: Yonhap News Agency