The North and the South are no longer speaking to one another
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. 'Puppet army gangs'
Tuesday's KCNA reports announcing the severing of all ties - including communications - said the North was also banning South Korean ships and planes from its territorial waters and airspace.
"The Committee for the Peaceful Reunification of Korea... formally declares that from now on it will put into force the resolute measures to totally freeze the inter-Korean relations, totally abrogate the agreement on non-aggression between the North and the South and completely halt the inter-Korean cooperation," KCNA reported.
Pyongyang has also accused South Korea of trespassing in its waters.
In a warning to South Korea's navy, a newsreader on North Korean state television (KRT) said: "South Korean puppet army gangs have been recently trespassing our territorial waters without restraint.
"They have conducted provocative acts which severely irritate us, by making dozens of warships intrude upon our waters from 14 to 24 May."
The newsreader said that if this "deliberate provocation" continued, the North would "put into force practical military measures to defend its waters".
As Captain Ed notes, no one wants to see the Korean War start back up again. (Remember, these two nations are under a cease-fire; no peace treaty was signed, and neither nation surrendered.) As of right now the North seems to be rattling its saber towards the South, and Kim Jong-Il might want to step lightly right now. Ban Ki-moon is urging toe UN Security Council to act against North Korea, and the US has stated it will be conducting maneuvers with the South Koreans shortly. (No, we're not holding our breath on the UN's response to this as the Security Council has been reluctant to deal with North Korea, as a whole, but tougher sanctions could ratchet up the pressure on the North to cool their heels.)
The North desperately needs the South. South Korea has been sending food and humanitarian aid to the North for some time now, staving off the potential collapse of the country. Kim Jong-Il already has a starving populace, and he has been the target of at least three coup attempts. The last one was reported back in 1998, and it involved his 6th army corps. Why? Because his military was starving, as well. So that could be a possible scenario if tensions continue to grow, and Kim doesn't back down. No doubt he'll be appealing to China for assistance soon enough, but back in 2006 Chinese officials voiced sentiments that China might be willing to back a coup removing Kim Jong-Il from power. So, Kim is still stuck between a rock and a hard place. He can't afford a new, armed conflict because we would back the South. Additionally, if China backs our play, Kim will have more headaches than he knows what to do with.
Personally, I think a lot of the bluster from the North is simply hot air. The South's investigation of the sinking of their ship was quite conclusive. It was torpedoed, or it hit a mine. Either way, the North is responsible for this provocation. It'd be a lot simpler if Kim simply apologized to the South, but pride and hubris are keeping him from doing that.
Do I see much coming from this stand-off? Not right now. But the ball isn't back in the South's court. It's still stuck in Kim's court, and cutting off his nation's nose to spite it's face wasn't exactly the smartest diplomatic move.