North Korea has vowed to immediately deport all South Korean nationals and freeze all South Korean assets at a jointly run factory park in the North.
Pyongyang said it was also pulling all its workers from the Kaesong complex, just across the tense border, in response to the South's suspension of operations there following North Korea's recent long-range rocket launch.
The North's statement, by the Committee for the Peaceful Reunification of Korea, was issued through the Korean Central News Agency.
North Korea said the South's shutdown announcement was a "dangerous declaration of war".
Pyongyang also said it was shutting down two crucial cross-border communications hotlines.