North Korea has blown up its joint liaison office with the South near the border town of Kaesong, South Korean officials say, reports BBC.
The move comes just hours after the North renewed threats of military action at the Korean border.
The site, which is in the North's territory, was opened in 2018 to help the two Koreas to communicate.
The liaison office has been empty since January due to Covid-19 restrictions.
Tensions between North and South Korea have been escalating for weeks, prompted by defector groups in the south sending propaganda across the border.
The North Korean leader's sister, Kim Yo-jong, threatened to demolish the office in a statement at the weekend.
South Korea's Unification Ministry in Seoul confirmed that at 14:49 local time there was an explosion.
In recent weeks, North Korea has repeatedly condemned the South for allowing propaganda into its territory.
Defector groups regularly send such material via balloons, or even drones, into the North.
Last Tuesday, Pyongyang announced it was severing all official communication links with Seoul.
Over the weekend, Kim Yo-jong threatened to send troops into the demilitarised zone (DMZ) at the inter-Korean border.
Then, before the explosion on Tuesday, the military leadership confirmed it was ready to "turn the frontline into a fortress".
"North Korea's violent destruction of the liaison office at Kaesong is a symbolic blow to inter-Korean reconciliation and co-operation," said Leif-Eric Easley, a professor at Ewha University in Seoul.
"It's hard to see how such behaviour will help the Kim regime get what it wants from the world, but clearly such images will be used for domestic propaganda."
Analysts say Pyongyang may also be seeking to create a crisis to increase its leverage as nuclear negotiations with the US are at a standstill.
North and South Korea are technically still at war because no peace agreement was reached when the Korean War ended in 1953.