North Korea is to cut all relations with South Korea, Pyongyang’s official news agency reports.
KCNA said the North was also expelling all South Korean workers from a jointly-run factory north of the border.
The move comes after an international report blamed North Korea for sinking a South Korean warship.
Pyongyang denies it torpedoed the Cheonan near the inter-Korean maritime border on 26 March, killing 46 sailors.
South Korea says it plans to refer North Korea to the UN Security Council, and is seeking a unified international response to the incident.
Seoul announced on Sunday it was ending trade relations with the North in response to the sinking.
It has also resumed propaganda broadcasts to the North, playing radio programs that will soon to be broadcast via border loudspeakers.