Kim Kwan-jin said when and if it happens depends on North Korean leaders, Yonhap News Agency reported.
Speaking to Parliament in Seoul, Kim said North Korea had prepared its Punggye-ri site for an underground nuclear test and that "initial steps" had been taken for a missile launch at a test site in Tongchang-ri.
"These things depend on the decision by the North Korean leadership," Kim said. "As seen in the past, the long-range missile test and the nuclear test are connected to each other. We are closely watching [the North Korean military] to prepare against any provocations."
Pyongyang tested several missile engine tests at Tongchang-ri last year and has been renovating the facility since May, the south's National Intelligence Service reported in October.
A U.S.-based website that covers North Korea-related news, 38 North, said last month that, based on satellite images, Pyongyang appeared to have tested a rocket engine for an intercontinental ballistic missile between December and early January.