Kim, who took over North Korea after his father and national founder Kim Il-sung died in 1994, "passed away from a great mental and physical strain" during a train ride at 8:30 a.m. on Saturday, the Korean Central News Agency said in an urgent dispatch.
A female newscaster, clad in a black funeral dress, tearfully announced the death on state TV.
KCNA said the medical cause was an "advanced acute myocardial infarction, complicated by serious heart shock," using the technical terms for a heart attack. His father, Kim Il-sung, also died of a heart attack.
"He suffered an advanced acute myocardial infarction, complicated by serious heart shock, on a train on December 17 ... from a great mental and physical strain caused by his uninterrupted field guidance tour for the building of a thriving nation," KCNA said.
Kim's health is believed to have worsened after he apparently suffered a stroke in 2008.
His body will be placed in the Kumsusan Memorial Palace where the embalmed body of his father and the late national founder lies, according to the KCNA. The North set a mourning period from Dec. 17 to Dec. 29, though it said it won't accept foreign delegations at the funeral ceremony scheduled to be held in Pyongyang on Dec. 28.
Kim's heir-apparent son, Jong-un, was named first in the membership list of the North's the 232-member funeral commission, an apparent indication that the younger Kim will chair the commission.
That could also be seen as a possible sign that the communist nation is under control. Experts had suggested that any sudden incapacitation of the autocratic leader could lead to a power struggle in the totalitarian nation.
The late leader had been grooming his youngest son, believed to be in his late 20s, as his successor, promoting him to the rank of four-star general and placing him in key posts at the ruling Workers' Party last year.
KCNA said later the North's military and people "pledged to uphold the leadership" of his son.
South Korea put its military and police on high alert and ordered all of its diplomatic missions overseas to go on standby. The Joint Chiefs of Staff said it has increased its monitoring activities along the border, but no unusual activity had been observed from the North.
Officials said they may raise the "Defcon," a five-stage combat alert level, from its current level of four to three, and may also increase the Watchcon, an anti-North Korea surveillance alert, from three to two. Watchcon two signifies a state of emergency with indications of a vital threat from North Korea.
"We're keeping close tabs on the demilitarized zone (DMZ), Joint Security Area (JSA) and Northern Limit Line (NLL) for possibilities of North Korean provocations," one JCS official said, referring to volatile border areas on land and in sea.
President Lee Myung-bak presided over an emergency meeting of the National Security Council after calling off all of his scheduled plans for later in the day. Lee also ordered all government officials to be placed on emergency response.
Lee called on South Koreans to remain calm and focus on their usual work, his office said.
"The government will remain thoroughly prepared while keeping a close watch over the situation in North Korea," the presidential office said in a statement. "The government will also cooperate closely with the international community to maintain peace and safety on the Korean Peninsula."
Lee also spoke by phone with U.S. President Barack Obama and agreed that the two allies will work closely together in keeping a close watch over the communist North and coping with the aftermath of Kim's death, presidential spokesman Park Jeong-ha said.
"The President reaffirmed the United States' strong commitment to the stability of the Korean Peninsula and the security of our close ally, the Republic of Korea," the White House said. "The two leaders agreed to stay in close touch as the situation develops and agreed they would direct their national security teams to continue close coordination."
Later, Lee also had a telephone conversation with Japanese Prime Minister Yoshihiko Noda where the two leaders pledged close cooperation, including brisk exchange of information between the two sides, the spokesman said.
In Washington earlier, an official said that President Barack Obama has been "notified" of the reported death of the North's leader, and the White House is consulting with South Korea and Japan on the emergency situation.
"We are closely monitoring reports that Kim Jong-il is dead. The President has been notified, and we are in close touch with our allies in South Korea and Japan," White House Press Secretary Jay Carney said in an emailed statement. "We remain committed to stability on the Korean Peninsula, and to the freedom and security of our allies."
Kim's death occurred at a time of a flurry of diplomatic efforts to resume long-stalled talks on ending Pyongyang's nuclear weapons program. North Korea and the United States were expected to hold a third round of bilateral nuclear talks in Beijing this week.
The planned talks are expected to be canceled, a government official said. North Korea had been expected to announce during the talks that it would suspend its uranium enrichment program and accept U.N. nuclear monitors in exchange for food aid.
That would mark a breakthrough deal that could lead to the resumption of the broader six-nation talks that have been suspended since the last session in late 2008. The talks bring together the two Koreas, China, Japan, Russia and the U.S.
North Korea conducted two nuclear tests, first in 2006 and second in 2009. Pyongyang is believed to have stockpiled enough plutonium for at least half a dozen nuclear bombs, experts do not believe the country has mastered the technology to put a nuclear warhead on a missile.
Kim's death also followed years of tension on the Korean peninsula.
Inter-Korean relations warmed significantly after the first summit between Kim and the South's then-President Kim Dae-jung in 2000. The North's late leader held a second summit in 2007 with then-President Roh Moo-hyun.
Inter-Korean ties frayed badly, however, after President Lee took office in early 2008 with pledges to halt aid to the impoverished North and link future assistance to progress towawrd ending Pyongyang's nuclear weapons programs.
The strained relations deteriorated further after North Korea torpedoed a South Korean warship in waters near their disputed border in March last year and shelled a border island in November. The attacks left a total of 50 South Koreans dead.
North Korea is one of the world's poorest nations. It has relied on foreign handouts to feed its 24 million people after natural disasters and mismanagement devastated its economy in the mid-1990s.
The late North Korean leader has long been accused of seeking nuclear, missile and other weapons of mass destruction programs while starving its population, despite repeated calls from the international community to forsake nuclear ambitions for a better future.
North Korea and South Korea fought each other in the 1950-53 Korean War, which ended in a cease-fire, not a peace treaty. The two sides are still technically at war, and their border is one of most heavily fortified in the world.
"The surprise development raises concerns about its impact on Pyongyang's ongoing leadership transition, regime stability, and North Korean security and foreign policies," Bruce Klingner, senior researcher at the Heritage Foundation said.
He said North Korean provocative behavior or military action is unlikely in the near term.
"However, Seoul and Washington will be wary that Kim Jong-un, third son of Kim Jong-il and the next leader of North Korea, may feel it necessary in the future to precipitate a crisis to prove his mettle to other senior leaders or to generate a 'rally around the flag effect,'" he added.