The statement by the North Korean military, released by the Korean Central News Agency (KCNA), said the measures were in retaliation to the hostile stance of the South Korean leadership, and Seoul's failure to honor summit agreements reached in 2000 and 2007.
"The South Korean puppets are still hell-bent on the treacherous and anti-reunification confrontational racket," the statement said.
The North Korean statement gave specific details on plans announced earlier in November to restrict border movement as of December 1.
The North Korean military will "selectively expel" South Koreans working at the Kaesong industrial zone, just north of the border, the statement said.
However, Pyongyang has stopped short of closing down the complex, which brings the impoverished communist state tens of millions of dollars in income per year.
Analysts have warned that a full closure of the industrial park, at which over 32,000 North Koreans work on labor-intensive light-industry projects run by South Korean companies, would deal a severe blow to relations between the countries.
Responding to the announcement, South Korean Unification Ministry spokesman Kim Ho-nyeon said: "This is a very grave situation that moves South-North relations backward."
North-South relations have deteriorated since President Lee Myung-bak came to power in South Korea in February. The new president has demanded more progress in the North's denuclearization in return for the economic support provided by the South.
The rail line running from South Korea to Kaesong had provided daily transit to the industrial park since the line's symbolic reopening last year. However, the freight trains had run largely empty, as South Korean companies preferred to use the cross-border highway.
