The move came as military tensions on the divided Korean peninsula soared following a rare exchange of artillery fire on Thursday that put the South Korean army on maximum alert.
Kim Jong-Un has given similarly bellicose orders in the past, most recently in 2013 when he declared "a state of war" with the South.
Technically, the two Koreas have been at war for the past 65 years, as the 1950-53 Korean conflict ended with a ceasefire that was never ratified by a formal peace treaty.
Kim chaired an emergency meeting late Thursday of the North's powerful Central Military Commission (CMC) which endorsed the ultimatum for the South to switch off its propaganda unit loudspeakers by Saturday afternoon.
According to the official KCNA news agency, Kim ordered frontline, combined units of the Korean People's Army (KPA) to "enter a wartime state" from Friday 5:00 pm (0830 GMT).
The troops should be "fully battle ready to launch surprise operations" while the entire frontline should be placed in a "semi-war state", KCNA quoted him as saying. The South Korean Joint Chiefs of Staff responded with a direct message to the KPA, urging it to refrain from any "reckless acts" and warning that it would react strongly to any further provocation.
"We've been here before several times, but that doesn't mean it isn't still dangerous," said Yoo Ho-Yeol, a professor of North Korean studies at Korea University in Seoul. "There's a real possibility of this confrontation leading to some sort of armed clash," Yoo said.
The last direct attack on the South was in November 2010 when North Korea shelled the South Korean border island of Yeonpyeong, killing two civilians and two soldiers.
On that occasion, South Korea responded by shelling North Korean positions, triggering brief fears of a full-scale conflict.
The South's coastguard said Friday that fishing fleets operating out of the border islands had been ordered to stay in port for an indefinite period.
The United States urged Pyongyang to avoid provoking any further escalation, with the Pentagon stressing it remained firmly committed to defending ally South Korea. South Korea's defence ministry rejected the North's ultimatum, which expires at 5:00 pm on Saturday, insisting it would "continue operating the loudspeakers". - AFP
