To advance quantum information science a constant pursuit is the search for physical systems that meet the stringent requirements for creating and preserving quantum entanglement. In atomic physics, robust two-qubit entanglement is typically achieved by strong, long-range interactions in the form of Coulomb interactions between ions or dipolar interactions between Rydberg atoms. While these interactions allow fast gates, atoms subject to these interactions must overcome the associated coupling to the environment and cross-talk among qubits. Local interactions, such as those requiring significant wavefunction overlap, can alleviate these detrimental effects yet present a new challenge: To distribute entanglement, qubits must be transported, merged for interaction, and then isolated for storage and subsequent operations. Here we show how, via a mobile optical tweezer, it is possible to prepare and locally entangle two ultracold neutral atoms, and then separate them while preserving their entanglement. While ground-state neutral atom experiments have measured dynamics consistent with spin entanglement, and detected entanglement with macroscopic observables, we are now able to demonstrate position-resolved two-particle coherence via application of a local gradient and parity measurements; this new entanglement-verification protocol could be applied to arbitrary spin-entangled states of spatially-separated atoms. The local entangling operation is achieved via ultracold spin-exchange interactions, and quantum tunneling is used to combine and separate atoms. Our toolset provides a framework for dynamically entangling remote qubits via local operations within a large-scale quantum register.