"From this time on, the North-South relations will be entering the state of war and all issues raised between the North and the South will be handled accordingly," a statement carried by the North's official KCNA news agency said.
North Korea has been threatening to attack the South and U.S. military bases almost on a daily basis since the beginning of March, when U.S. and South Korean militaries started routine drills, and has ordered its armed forces on the highest alert.
But the impoverished state has kept a joint industrial zone that is the source of hard currency where hundreds of South Korean workers and vehicles cross enter daily after crossing the rival Koreas' heavily armed border.
Few believe North Korea will risk starting a full-out war.
The two Koreas have been in a technical state of war because their 1950-53 conflict ended under an armistice and not a peace treaty, although Pyongyang earlier in March declared the truce no longer valid.
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