US forces said North Korea has been notified about the exercise plan set to run between 20 and 31 August.
"... we respond with good faith to good faith and with merciless punishment to provocation"
Committee for Peaceful Reunification of the Fatherland
The Committee for Peaceful Reunification of the Fatherland said the drill, staged since 1975, aimed to use force to stifle North Korea.
The drill was "an unacceptable provocation that drives the Korean peninsula situation to the phase of an extreme confrontation", it said in a statement carried by the official Korean Central News Agency.
North Korea said the exercise "poses obstacles to efforts to resolve" the standoff over its nuclear programmes and hinders reconciliation between the two Koreas.
"It remains our position that we respond with good faith to good faith and with merciless punishment to provocation," the committee said.
"Our army and the people will further solidify our war deterrent."
The North's reference to its "deterrent" is usually its nuclear programmes.
Last month Pyongyang shut down its sole functioning nuclear reactor in Yongbyon in return for energy aid under a deal with the US, China, Japan, South Korea and Russia.
The February deal also calls for it to disclose all nuclear programmes and disable its facilities.
About 28,000 US troops are stationed in South Korea as a legacy of the 1950-53 Korean War which ended in a cease-fire, leaving the two Koreas still technically at war.