The United States is to deploy an advanced missile defence system in South Korea, the two allies said Friday, as North Korea warned US sanctions against its leader amounted to a "declaration of war".

News of the unprecedented measures targeting Kim Jong-Un came as North Korea marked 22 years since the death of its founding president Kim Il-Sung, grandfather of the current "Supreme Leader".

Tensions have soared since Pyongyang carried out its fourth nuclear test in January, followed by a series of missile launches that analysts said show the North is making progress toward being able to strike the US mainland.

The US and South Korea began talks on deploying the Terminal High Altitude Area Defence system, or THAAD, to the Korean peninsula in February after the North fired off a long-range rocket.

"Based on these consultations, the (South) and the US made an alliance decision to deploy THAAD... as a defence measure to ensure the security of the (South) and its people," the allies' defence ministries said in a joint statement.

The allies have not revealed exactly when and where in South Korea the system would be deployed, saying they were in the final stages of selecting a potential venue.

The plan to deploy the powerful system, which fires projectiles to smash into enemy missiles, angered Beijing and Moscow, which both see it as a US bid to flex military muscle in the region.

Moscow said any deployment would have "irreparable consequences", while Beijing warned it would "seriously damage" regional security in northeast Asia and urged South Korea and the US to reconsider.

News of the deployment came after the US on Wednesday placed "Supreme Leader" Kim on its sanctions blacklist for the first time, calling him directly responsible for a long list of serious human rights abuses.

- 'Wartime law' -

Pyongyang lashed out at Washington on Friday, warning North Korea would instantly cut off all diplomatic channels with the US if the sanctions were not lifted.

"This is the worst hostility and an open declaration of war against the DPRK as it has gone far beyond the confrontation over the 'human rights issue,'" the foreign ministry said, using North Korea's official name.

"Now that the US declared a war on the DPRK, any problem arising in the relations with the US will be handled under the latter's wartime law," said the statement carried by the official KCNA news agency.

Kim, who took power four and a half years ago after the death of his father Kim Jong-Il, is the subject of a personality cult that permeates every aspect of life in the repressive state.

At midnight, Kim went to pay his respects at the giant mausoleum for his grandfather and father and during the day, thousands of sombrely-dressed party, government and military officials bowed and filed past the cases containing their embalmed bodies.

In the meticulously-manicured gardens outside the mausoleum, tens of thousands more -- including students, soldiers and office workers -- lined up to bow to giant portraits of the two Kims that dominate the facade of the building.

While the US sanctions naming Kim Jong-Un were more symbolic than substantive, the foreign ministry's angry reaction reflected North Korea's hyper-sensitivity to any personal attack on the ruling Kim family dynasty

North Korea often issues bellicose statements against the US, but the reference to "wartime law" is rare and analysts warned of more sabre-rattling to come over the sanctions.

"There will be a bombardment of diatribes from North Korea against the US as the military, government agencies and various social groups are likely to fall over themselves to prove their loyalty to Kim", Professor Yang Moo-Jin of the University of North Korean Studies told AFP.

China also condemned the latest round of US sanctions, saying it opposed "public pressure, confrontation and one country's imposing unilateral sanctions on another country by citing domestic laws".