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The KCNA report said Mr Kim declared a "semi-state of war" at an emergency meeting late Thursday.
It threatened action unless Seoul ends its anti-Pyongyang border broadcasts.
The North often uses fierce rhetoric when tensions rise and it has made similar declarations before.
The BBC's South Korea correspondent Steve Evans says that although this ritual of aggression often sees such language escalate to the firing of ammunition, this time the rhetoric is fiercer and and artillery shells are now in use.
KCNA reported that Mr Kim had ordered that troops be "fully ready for any military operations at any time" from 17:00 Friday local time (01:30 GMT), at the emergency meeting of the central military commission.
Residents evacuated
Earlier, the North warned that it would take strong military action if the South does not end border propaganda broadcasts and dismantles the broadcast facilities "within 48 hours".
However, in a separate letter Pyongyang said it was willing to resolve the issue even though it considers the broadcasts a declaration of war, South Korea Unification Ministry said, according to Reuters.
The tensions were ratcheted up after North Korea on Thursday shelled across the border reportedly to protest the propaganda broadcasts which restarted after a hiatus of 11 years.
The South responded with artillery fire. There were no reported casualties.
South Korea ordered the evacuation of residents from an area of its western border.
The two Koreas remain technically at war, because the 1950-1953 war ended in an armistice, not a peace treaty.
South Korea and the US also began annual joint military exercises on Monday - they describe the drills as defensive, but North Korea calls them a rehearsal for invasion.
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