The North's military General Staff said from now on it would open fire without warning at any South Korean ships if they intrude "even 0.001 millimetres" into disputed waters in the Yellow Sea.
Kim Jong-Un becomes North Korea ruling party chairman
It called for the South to apologise for the "reckless military provocation", which it said aimed to "drive the situation in the volatile hotspot to the brink of explosion".
"From now on, we will open direct fire on any warship of the South Korean puppet forces without warning, if it intrudes... even 0.001 mm in the hotspot of the West Sea," it was quoted as saying in a statement carried by Pyongyang's Korean Central News Agency (KCNA).
"They should be mindful that they would face our merciless retaliatory strikes anytime and at any place and in any way", it added.
It accused the South of responding to its efforts to create dialogue with "reckless military provocation".
US, South Korea, Japan to hold joint drill against North Korea
In recent weeks, Pyongyang has been urging Seoul to accept leader Kim Jong-Un's proposal for military talks aimed at easing cross-border tensions.
Seoul has flatly rejected the offer, insisting that the North should first take a tangible step towards ending its nuclear weapons programmes.
A South Korean naval vessel fired warning shots Friday after a patrol boat from the North and a fishing boat crossed the disputed sea border. The North's boats swiftly retreated.
US warns Americans against travel to North Korea
"This reckless military provocation was evidently prompted by a premeditated sinister plot to bedevil the north-south relations and further aggravate the tension on the Korean peninsula", KCNA said.
Both sides complain of frequent incursions by the other and there were minor naval clashes in 1999, 2002 and 2009.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ