It was higher than the previous record high of $36.81 billion in 2008.
Overseas direct investment usually refers to spending made by domestic companies and individuals to take at least a 10 per cent stake in a project or business underway in other countries, the ministry said.
The 2011 investment spike stemmed mostly from increased investment in mining and resource development projects, which doubled to $20.37 billion from a year earlier, the report showed.
The U.S. was the largest investment destination for South Korea, with $16.43 billion invested in the country. China and Australia came next with $4.87 billion and $4.11 billion, respectively, the report showed.The lingering eurozone debt crisis, however, led to a decline in investment bound for European countries. South Korea's investment for the region plunged 44.2 per cent on-year to $4.36 billion.
The ministry expects that overseas direct investment will likely continue to grow this year, driven by more demand for natural resources development and other business opportunities.
"Global fiscal troubles and a possible economic slowdown in emerging countries are aggravating uncertainties over the investment environment," the ministry said.
"Still, overseas direct investment will likely keep its upward trend this year thanks to our companies' expanded investment for overseas mergers and acquisitions and more spending on natural resources development projects," it added.