The North's official KCNA news agency said the exercises were a "provocation" and a rehearsal for an invasion.
It also warned the US over the fate of the historic summit between Kim Jong-un and US President Donald Trump that is scheduled for 12 June in Singapore.
In March, Mr Trump stunned the world by accepting an invitation to meet Mr Kim.
"We will both try to make it a very special moment for World Peace!" the US leader later tweeted.
The US state department said it was continuing to prepare for the Trump-Kim summit and that it was not aware of any changes in the North Korean position.
The political gamble of the 21st Century
How does North Korea's Kim Jong-un travel?
North Korea crisis in 300 words
What exactly has North Korea cancelled?
In short, the scheduled talks with South Korea were a follow-up to a rare summit that was held on 27 April.
They were agreed earlier this week and were set to take place at Panmunjom, a military compound in the demilitarised zone between the two countries that is often referred to as the "truce town".