The drone cruised underwater at a depth of 80 to 150 metres for more than 59 hours and detonated a non-nuclear payload in waters off its east coast on Thursday, North Korean state news agency KCNA said on Friday.
Analysts say North Korea is showing off its increasingly diverse nuclear threats to Washington and Seoul, though they are sceptical whether the underwater vehicle is ready for deployment.
North Korea intends to signal "to the United States and South Korea that in a war, the potential vectors of nuclear weapons delivery that the allies would have to worry about and target would be vast," said Ankit Panda, senior fellow at the US-based Carnegie Endowment for International Peace.
"There would be silos, railcars, submarines and road mobile missile launchers and now they're adding this underwater torpedo to the mix," he said.
On Monday, the isolated country flew a short-range missile from a buried silo, a departure from usual basing methods.
Dubbed "Haeil", or tsunami, the new drone system is intended to make sneak attacks in enemy waters and destroy naval strike groups and major operational ports by creating a large radioactive wave through an underwater explosion, the KCNA said.
"This nuclear underwater attack drone can be deployed at any coast and port or towed by a surface ship for operation," the news agency said, adding that Kim oversaw the test.
A South Korean military official said they were analysing North Korea's claims.
A US official, speaking on the condition of anonymity, said there was no indication of a nuclear test.
It is unclear whether North Korea has fully developed miniaturised nuclear warheads needed to fit on its smaller weapons.
Analysts say perfecting such warheads would most likely be a key goal if the North resumes nuclear testing.
A photo released by state media showed Kim smiling next to a large torpedo-shaped object but did not identify it as the new drone.
Other photos showed tracks of the object's underwater trajectory, and blasts visible on the sea surface.
On Friday South Korean President Yoon Suk Yeol said he would make sure North Korea paid for its "reckless provocations" during a speech to commemorate service members who died in clashes with North Korea in western waters, including a 2010 sinking of a navy ship that South Korea said was struck by a North Korean torpedo.
North Korea said military exercises by the US and South Korea require its forces to "gird themselves for an all-out war and bolster up its nuclear force both in quality and quantity on a priority basis".
South Korea and the US say the exercises are purely defensive and have criticised the North's tests as destabilising and in breach of UN sanctions.
The allies concluded 11 days of their regular springtime exercises, called Freedom Shield 23, on Thursday but have other field training exercises continuing.
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