Kim said it was his final conclusion that unification with the South is no longer possible in a speech at the Supreme People's Assembly, North Korea's rubber-stamp parliament, while accusing Seoul of seeking regime collapse and unification by absorption.
"We don't want war but we have no intention of avoiding it," Kim was quoted as saying by state media KCNA on Tuesday.
Three organisations dealing with unification and inter-Korean tourism will shut down, state media said.
The move comes as tensions have worsened in the Korean Peninsula recently amid a series of missile tests and a push by Pyongyang to break with decades of policy and change how it relates to the South.
Analysts have said North Korea's foreign ministry could take over relations with Seoul, and potentially help justify the use of nuclear weapons against the South in a future war.
In a report for the US-based 38 North project last week, former State Department official Robert Carlin and nuclear scientist Siegfried Hecker said they see the situation on the Korean Peninsula as more dangerous than it has been at any time since early June 1950.
"That may sound overly dramatic, but we believe that, like his grandfather in 1950, Kim Jong Un has made a strategic decision to go to war," they wrote.
"We do not know when or how Kim plans to pull the trigger, but the danger is already far beyond the routine warnings in Washington, Seoul and Tokyo about Pyongyang's 'provocations.'"
Other observers have been more optimistic, however, saying the changes simply reflect reality and may help the two Koreas eventually normalise relations.
