South Korea and the United States will hold a joint naval exercise next week, a report said Saturday, in a move seen as a warning to North Korea ahead of its widely expected nuclear test.

The three-day exercise involving a US nuclear submarine and other warships will begin on Monday in the Sea of Japan (East Sea) off the South Korean port city of Pohang, Yonhap news agency reported.

"It will include anti-submarine and anti-air trainings and maritime manoeuvrings," a military official was quoted as saying in the report.

The exercise comes as tensions run high on the Korean peninsula, with Pyongyang threatening to carry out its third nuclear test in response to UN sanctions imposed for a long-range rocket launch it carried out in December.

The North said the launch was a scientific mission aimed at placing a satellite in orbit, but most of the world saw it as a disguised ballistic missile test.

South Korea's Joint Chiefs of Staff Jung Seung-Jo said Friday the drill aims to test combat readiness between Seoul and Washington while guarding against possible North Korean provocations involving submarines, according to Yonhap.

A 6,900-tonne US nuclear submarine USS San Francisco and a 9,800-tonne Aegis destroyer USS Shiloh were being mobilised for the exercise.

"The presence of a US nuclear submarine here would itself serve as a message to North Korea," Jung said.

North Korea has reportedly covered the entrance to a tunnel at its nuclear test site in an apparent effort to avoid satellite monitoring of its ongoing preparations for a possibly imminent detonation.

A camouflage net was placed on the tunnel entrance at Punggye-ri in the northeastern North Korea, the site of the two previous nuclear tests in 2006 and 2009.

But a government source in Seoul said that increased activity had been spotted at the site, which has three tunnel entrances and multiple support buildings.

"At a tunnel in the southern part of the test site in Punggye-ri, we've found that work presumed to be part of preparations for a nuclear test has entered its final stage," the unnamed source told Yonhap on Saturday.

"The North may conduct the test at either the western or southern tunnels. But the activities spotted near the southern one could be aimed at distracting us from the more likely place of the western tunnel."

Pyongyang once again warned Saturday of "toughest retaliation" over the tightening of UN sanctions, according to the North's official Korean Central News Agency, in a sign that a test may be imminent.