At a ceremony to launch a new 5,000-ton vessel in the eastern port city of Chongjin on Wednesday "a serious accident occurred", the official Korean Central News Agency (KCNA) said.
South Korea's military said North Korea also fired "multiple unidentified cruise missiles" on Thursday, which were detected near the North's South Hamgyong province after being "fired toward the East Sea", also known as the Sea of Japan.
Blaming "inexperienced command and operational carelessness" for the destroyer's botched launch -- which was observed by Kim -- KCNA said there was a mishap which left "some sections of the warship's bottom crushed".
It said the accident managed to "destroy the balance of the warship".
Kim watched the entire incident and declared it a "criminal act caused by absolute carelessness", warning it "could not be tolerated".
He said the "irresponsible errors" of officials responsible would be "dealt with at the plenary meeting of the Party Central Committee to be convened next month".
South Korea's military said US and Seoul intelligence authorities assess that North Korea's "side-launch attempt" of the ship failed.
"The side-launch method used in this case is no longer employed by South Korea's military," Lee Sung-jun, spokesperson for the Joint Chiefs of Staff, told reporters.
The vessel is currently listing in the water, Lee said, and based on its size and scale, it is believed to be similarly equipped to the 5,000-ton destroyer-class warship Choe Hyon, which North Korea unveiled last month.
Last month, Pyongyang's state media ran images of Kim attending a launching ceremony of Choe Hyon with his daughter Ju Ae, considered by many experts to be his likely successor.
North Korea claimed the vessel was equipped with the "most powerful weapons", and that it would "enter into operation early next year".
Some analysts said the ship could be equipped with short-range tactical missiles capable of carrying nuclear warheads -- although North Korea has not proven it has the ability to miniaturise its atomic arsenal.
- Russian connection? -
The South Korean military has said the Choe Hyon could have been developed with Russian help -- possibly in exchange for Pyongyang deploying thousands of troops to help Moscow fight Ukraine.
Ahn Chan-il, a defector-turned-researcher who runs the World Institute for North Korea Studies, said the warship involved in Wednesday's accident may have also been constructed with Russian assistance.
Chongjin, the North Korean city where the launch ceremony was held, is close to Russia's Vladivostok port, he noted.
"It's also likely that the projected timeline for the vessel -- including when assembly would be completed and the ship launched -- was shared with the Russian side," he told AFP.
"It appears the dock was hastily constructed, and multiple issues may have arisen during the shipbuilding process.
"With today's announcement, Pyongyang seems to be signalling not only to its own people, but also to the Russian side."
- Strengthening the navy -
North Korea confirmed in April for the first time that it had deployed troops to Russia to support Moscow in the Ukraine war.
Moscow and Pyongyang recently announced that they had started building the first road bridge linking the two countries.
North Korea also launched a flurry of ballistic missiles last year in violation of UN sanctions.
In March, Kim inspected a project to build a nuclear-powered submarine, asserting that "radically" boosting the navy was a key part of Pyongyang's defensive strategy.
Kim called at the time for the modernisation of the country's surface and underwater naval forces, including the development of warships.
Pyongyang has previously claimed to be developing underwater nuclear attack drones, which could unleash a "radioactive tsunami", but analysts have questioned whether it actually has such a weapon.
Washington -- Seoul's key security ally -- has in recent years ramped up joint military exercises and increased the presence of strategic US assets in the region to deter the North, such as an aircraft carrier and a nuclear-powered submarine.
Pyongyang has repeatedly declared itself an "irreversible" nuclear weapons state and routinely denounces joint US-South Korea drills as rehearsals for invasion.
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