South Korea says all options are being considered, "including possible military action," to ensure the safety of its citizens who remain in a jointly-run industrial zone inside North Korea.
Defense Minister Kim Kwan-jin says South Korea has prepared contingency plans after North Korea blocked access to the Kaesong Industrial Park on March 3.
A spokesman for South Korea's Unification Ministry, Kim Hyung-seok, told reporters that the North had informed it of the decision earlier that day.
"This morning, North Korea has informed us that it will suspend entry [for our citizens], but will allow them to depart [from North Korea]," he said. "Our government regrets that today's situation and that the transit to the Kaesong industrial zone was not normal."
More than 800 South Koreans remain in Kaesong. Hours after North Korea blocked access to the zone, only a few had returned to South Korea.
The Unification Ministry says it appears that many South Koreans voluntarily decided to stay in Kaesong to ensure the smooth operation of their businesses.
North Korea's latest move comes at a time of escalating tensions on the Korean Peninsula.
In February, North Korea carried out its third nuclear-weapons test.
On March 2, Pyongyang declared it plans to “readjust and restart” nuclear facilities at Yongbyon. This complex includes a reactor that can produce weapons-grade plutonium and a uranium enrichment plant.
U.S. State Department Victoria Nuland described Pyongyang's rhetoric as unacceptable.
"Obviously, there's a long way to go between a stated intention [of restarting the nuclear facilities] and actually being able to pull it off with all that that would entail," she said. "But were they to be able to put themselves back into a position to use the [Yongbyon] facility that would obviously be extremely alarming. What we have, as of today, is a stated intention to violate their international obligations further. That's not going to take them any closer to ending their isolation, to feeding their people, or in any way improving the quality of life in the [North Korea]."
In the last few weeks, the North has threatened to carry out attacks on U.S. military bases in the Pacific and in the mainland United States and declared that "a state of war" existed with South Korea.
As part of annual joint military exercises with South Korea, U.S. nuclear-capable bombers and stealth aircraft have carried out flights over South Korea in recent days.
U.S. officials have confirmed that two warships have also been deployed in the region.
On March 2, UN Secretary-General Ban Ki-moon warned that the crisis had "gone too far" and called for calm.
China has appealed for "calm and restraint," while Russia said it was worried by the "explosive" situation on the Korean Peninsula.
With reporting by Reuters and AFP