"It should bear in mind that the military retaliation of the DPRK is a merciless strike foreseeing even the turn of Seoul, the stronghold of the group of traitors, into a sea of flame."
'Declaration of war'
The move amounted to "a direct declaration of a war" and a "flagrant violation" of the inter-Korean declaration for peace and reconciliation signed in 2000, the statement added.
"Therefore, the revolutionary armed forces of the DPRK will launch an all-out military strike to blow up the group's means for the psychological warfare," it said.
The statement, published by Pyongyang's official Korean Central News Agency, described the loudspeakers as "a hideous provocative act of infringing upon the dignity and supreme interests of the DPRK".
Tensions between the two Koreas are high after a multinational investigation said that a torpedo fired by a North Korea submarine sank a South Korean warship in March, killing 46 sailors, near the disputed sea border in the Yellow Sea.
The two sides have remained technically at war since the end of the 1950-53 conflict, and each waged a cross-border propaganda campaign during and after the Cold War.
They agreed in 2004 to halt the official propaganda to ease relations, although the North still complains strongly about private Seoul groups which launch anti-Pyongyang leaflets across the tightly guarded frontier.