North Korea said it would immediately "weaponise" all its plutonium stocks and start enriching uranium and warned that any blockade of its vessels would be considered an act of war.
The measures announced by the Foreign Ministry in Pyongyang came hours after the UN Security Council slapped fresh sanctions on the regime.
This will further ramp up tensions in this already volatile region with US intelligence sources warning that North Korea could launch another test missile over the next 48 hours.
According to Fox News, US intelligence has also warned President Barack Obama that North Korea intends to respond to the imposition of UN sanctions by carrying out another underground nuclear test and launching a third Taepodong 2 long range missile.
On Monday, North Korea said it would respond to any new sanctions with "corresponding self - defense measures".
The North said it would use nuclear weapons in a "merciless offensive" if provoked.
The new sanctions which were passed unanimously toughen an already existing arms embargo and authorise ship searches on the high seas to combat the sale of ballistic missiles.
It is believed that Pyongyang earns more than $1.5bn in missile sales to countries such as Syria, Pakistan and Iran.
North Korea has said it will view any sanctions as a declaration of war and boycotted yesterday's vote in the UN.
Unusually the sanctions were backed by China and Russia, the North's closest allies, an indication of the depth of international disapproval for recent actions by North Korea.
Last month it thumbed its nose at the Security Council when it detonated a second underground nuclear weapon and fired off a flurry of short range missiles.
China's UN Ambassador Zhang Yesui said the resolution demonstrates the international community's "firm opposition" to the nuclear test.
Mr Zhang said the resolution also "sends a positive signal" by showing the Council's determination to resolve the issue "peacefully through dialogue and negotiations".
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