North Korean state media released images Tuesday of what it said was the destruction of the joint liaison office with South Korea.
Seoul's Unification Ministry confirmed that the building in the North Korean border town of Kaesong was demolished "by bombing" on Tuesday afternoon local time, NBC News reported.
Rising tensions on the Korean Peninsula saw North Korea cutting off communications with the South and threatening to move armed forces back into demilitarized zones on the border.
The warnings came amid stalled nuclear talks with the U.S., and could be a signal that Pyongyang is frustrated with what it views as "failed democracy," John Park, director of the Korea Project at the Harvard Kennedy School, told CNBC on Monday.
The two countries are technically still at war, as the Korean war did not formally end with a peace treaty in 1953, but concluded with a truce.
The inter-Korean office was opened in 2018 during a time of warmer relations between the two sides.
North Korean leader Kim Jong Un and South Korean President Moon Jae-in met at least three times that year, raising hopes of reconciliation at that time. Relations soured after that.
— CNBC's Huileng Tan contributed to this report.