North Korea's space agency is building a new satellite and readying it for launch, state media said late on Monday, with any use of a long-range rocket suggesting that the secretive state has made advances developing a ballistic missile.

North Korea has been expected to launch an upgraded long-range ballistic missile, which would violate international sanctions, as it prepares to celebrate the anniversary of the founding of its ruling Workers' Party of Korea (WPK) on October 10.

"The world will clearly see a series of satellites of Songun Korea soaring into the sky at the times and locations determined by the WPK Central Committee," the North's KCNA news agency said. Songun refers to North Korea's "military first" policy.

The director of North Korea's National Aerospace Development Administration was quoted by KCNA as saying the agency was at a "final phase" of developing a new earth observation satellite.

"Successful progress made in reconstructing and expanding satellite launching grounds for higher-level satellite lift-off has laid a firm foundation for dynamically pushing ahead with the nation's development of space science," the director said.

South Korea and the United States said after the North's statement that any activity involving ballistic missile technology would violate UN Security Council sanctions.

Work to upgrade the North's west coast rocket site is "in the final stage" but surveillance by US and South Korean intelligence has detected no unusual activities there currently, the South's defence ministry spokesman Kim Min-seok said.

A successful launch would signal an advance in extending the range of a missile or in increasing the weight of any weapons payload, said Shin In-kyun, who runs the Korea Defence Network, an independent forum inSeoul."The ability to carry a nuclear warhead, about 1.3 tonnes, and soar would be an ominous prospect, because that puts the US west coast within range for that kind of warhead," he said.

North Korea has tested nuclear devices and is believed by US and South Korean officials to be working to miniaturise a nuclear warhead to mount on a delivery vehicle.

North Korea says its rocket launches are part of a legitimate space program aimed at putting satellites into orbit. It has in the past conducted missile tests in defiance of international warnings and sanctions.

In 2012, North Korea launched what is generally considered a long-range rocket, with a range believed to have been around 8,000 km (4,800 miles), to put what it called a satellite into orbit.