The statement carried by the Korean Central News Agency said all North Korean workers will be withdrawn from the complex in Kaesong, a border town just north of the demilitarized zone, Yonhap reported.
The statement warned follow-up measures will be taken after reviewing actions by South Korea.
North Korea has taken a more bellicose stance since it was roundly criticized by the international community and then sanctioned by the United Nations for its nuclear test in February. Among other things, North Korea threatened pre-emptive action against South Korea and the United States, unilaterally voided the Korean War cease-fire treaty and severed its hotline with Seoul.
In Seoul, South Korea's Defense Ministry said Monday satellite imagery showing the movement of vehicles and personnel near North Korea's nuclear test site is considered normal activity, contradicting speculation the latest actions may indicate a fourth nuclear test, Yonhap reported.
Local media had reported North Korea may be prepping for the test at the Punggye-ri test site in its northeastern tip.
Earlier reporting quoted a South Korean government official as saying: "We have detected increased activity of labor forces and vehicles at the southern tunnel of the test site in Punggye-ri, where the regime has worked on maintenance for facilities since its third nuclear test in February."
In Washington, the Pentagon said Sunday Defense Secretary Chuck Hagel postponed tests of an intercontinental ballistic missile planned for this week, expressing concern the tests could "exacerbate the crisis," The New York Times reported.
The tests will be rescheduled.
"The U.S. made a decision to delay the ICBM test not to give cause for the North to provoke," South Korean Defense Ministry spokesman Kim Min-seok told Yonhap. "Our military is calmly observing the North's movement."
Chinese President Xi Jinping referred indirectly to the crisis Sunday, saying, "No one should be allowed to throw a region and even the whole world into chaos for selfish gains."
"While pursuing its own interests, a country should accommodate the legitimate interests of others," he said at a regional business forum in Boao, China, near Qionghai, adding the international community and its collective scrutiny should be a platform for common development rather than an "arena where gladiators fight each other."
Western diplomats attending the conference said Xi's intentionally ambiguous wording appeared to be a veiled warning to Pyongyang but could also have been partly directed at Washington, The Financial Times said.
Beijing often accuses Washington of meddling in the region.
In Washington Monday, White House press secretary Jay Carney said the United States still is taking "prudent measures" in response to the "increased provocative behavior and rhetoric emanating from Pyongyang."
Carney said Washington was in "regular consultation" about the situation with allies in Seoul and Tokyo, as well as with its partners in and around the world.
Still, Carney said, members of previous presidential administrations have said this is a pattern of behavior "we have seen before. And it has never achieved anything substantial for the North Korean people."
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