North Korea has told Seoul it is banning access to their Kaesong joint industrial park but says South Koreans in the complex would be allowed to leave.
"The North this morning notified us that it will only allow returning trips from Kaesong and will ban trips to the complex," Unification Ministry spokesperson Kim Hyung-Suk told reporters on Wednesday.
Mr Kim says the North had not specified how long the ban would remain in effect, AFP reports.
Describing the North's move as "very regrettable", Kim said his government's first priority was the safety of the estimated 861 of its citizens currently in Kaesong.
"We expect our people currently in the North to return safely."
The industrial complex, which lies 10 kilometres inside North Korea, was established in 2004 as a symbol of cross-border cooperation.
North Korea has always been wary of allowing crises in inter-Korean relations to affect the zone - a crucial hard-currency earner for the communist state, says AFP.
The latest North Korean move fits into a cycle of escalating tensions that prompted United Nations chief Ban Ki-moon to warn on Tuesday that the situation had "gone too far" as the United States vowed to defend itself and regional ally South Korea.
It was not immediately clear if the blocked movement was permanent, but the Unification Ministry stressed that plants in Kaesong were running normally, reports AFP.
"We are waiting, unable to leave," Kim Dong-kyu, a company manager currently in Kaesong told the YTN news channel. "We don't know the situation well but I'm not particularly worried."
The last time the border crossing was blocked was March 2009 in protest at a major US-South Korean military exercise. It reopened a day later.