Earlier a tearful North Korean television announcer, dressed in black and her voice quavering, said the 69-year old ruler died on Saturday of "physical and mental over-work" on a train on his way to give field guidance -- advice dispensed by the "Dear Leader" on trips to factories, farms and the military.
Security concerns over the hermit state, that in 2010 shelled civilians on a South Korean island and is blamed for the sinking of one of its warships earlier that year, were heightened after Seoul said the North had test-fired a short range missile prior to the announcement of Kim's death.
It was the first known launch since June and in a bid to calm tensions, South Korea's defense ministry said it might abandon plans to light Christmas trees on the border, something the North has warned could provoke retaliations.
North Korea's official KCNA news agency lauded Kim's youngest son, Kim Jong-un as "the outstanding leader of our party, army and people."
"We have esteemed comrade Kim Jong-un," KCNA led a dispatch that said North Koreans from all walks of life are in utter despair but were finding comfort in the "absolute surety that the leadership of Comrade Kim Jong-un will lead and succeed the great task of revolutionary enterprise."
But there was uncertainty about how much support the third generation of the North's ruling dynasty has among the ruling elite, especially in the military, and worry he might need a military show of strength to help establish his credentials.
"Kim Jong-un is a pale reflection of his father and grandfather. He has not had the decades of grooming and securing of a power base that Jong-il enjoyed before assuming control from his father," said Bruce Klingner, an Asia policy analyst at the Heritage Foundation in Washington.
"(He) may feel it necessary in the future to precipitate a crisis to prove his mettle to other senior leaders or deflect attention from the regime's failings."
Video from Chinese state television showed residents weeping in the North Korean capital Pyongyang. KCNA reported people were "writhing in pain" from the loss of the man who in 1994 assumed the leadership of the totalitarian state from his father Kim Il-sung, the North's first, and officially eternal, president.
Large crowds gathered at a massive memorial of Kim's father and state founder Kim Il-sung in central Pyongyang mourning the death of the "Dear Leader." Kim will be laid to rest next to his father, KCNA said.
The funeral of Kim, turned into a demi-god by his propaganda machine, will be held on December 28.
News of the death of the man whose push to build a nuclear arsenal left the North heavily sanctioned and internationally isolated, triggered immediate nervousness in the region, with South Korea stepping up its military alert.
China, the North's neighbor and only powerful ally, said it was confident the North would remain united and that the two countries would maintain their relationship.
"We were distressed to learn of the unfortunate passing of (Kim) ... and we express our grief about this and extend our condolences to the people of North Korea," Foreign Ministry spokesman Ma Zhaoxu was quoted by Xinhua news agency as saying.
"We are confident the North Korean people will be able to turn their anguish into strength and unify as one," he said.
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