South Korea said earlier in the day that the North should take full responsibility for all consequences if it put into action its threat to conduct a nuclear test.
Asked to elaborate on what the consequences would be, Foreign Ministry spokesman Choo Kyu-ho told the Associated Press that a nuclear test "could bring about a shift" in South Korea's policy of engagement with Pyongyang. He didn't elaborate.
South Korea has consistently pursued dialogue with North Korea since their leaders first met in a historic summit in 2000. That approach has caused a rift with Washington that favors a harder line toward the communist regime.
Seoul is one of the main aid providers to the impoverished North.
North Korea said Tuesday that it would conduct a nuclear explosion to prove the country is a nuclear power. Pyongyang has since last year claimed it has atomic bombs, but hasn't performed any known test to verify that.
South Korea urged the North to renounce the test plan and immediately return to six-party talks on its nuclear program.
"We express grave concern and regret," said Choo, after the country held an emergency meeting of security ministers. "If North Korea pushes ahead with a nuclear test, North Korea should take full responsibility for all consequences."
The North's statement further spiked the already high tension in the region in the wake of the North's test-firing of a series of missiles in July.
Six-party talks on North Korea's nuclear program have been stalled since November last year as Pyongyang refuses to attend in anger over U.S. efforts to cut off the North's access to international banking over the country's alleged financial wrongdoing. The talks involve China, Japan, Koreas, Russia and the United States.
The North's announcement prompted South Korea to raise its security level and spurred strong condemnation from countries around the world. U.S. Secretary of State Condoleezza Rice said a North Korean nuclear test would be "a very provocative act."
The North Korean nuclear crisis flared in late 2002 after Washington accused the North of running a clandestine atomic bomb program in violation of its pledge not to do so. Pyongyang denies the claim.
The two Koreas are still technically at war as the 1950-53 Korean War ended in a truce, not a peace treaty. But their relations warmed significantly after the 2000 summit.