SEOUL, SOUTH KOREA - South Korea on Friday unveiled a military reform package aimed at streamlining its army and increasing its artillery in the face of North Korea's nuclear and missile threats.

The plan focuses on the need to expand its range of high-tech military assets capable of monitoring and striking North Korean nuclear and missile bases.

The defence ministry said South Korea would cut the size of its mainly conscript military to 517,000 from the current 655,000 by 2020, and arm it with new tanks, fighter jets and advanced weapons.

South Korea, backed up by a 28,500-strong US contingent, faces off against North Korea's 1.2 million-strong armed forces.

The plan is designed to produce a smaller but stronger military, the ministry said, adding that South Korea would also bolster its ability to scrutinise North Korean bases through the acquisition of high-tech surveillance equipment.

"Our military will strengthen its capability for precision strikes on North Korea," Lieutenant General Kim Ki-Soo told reporters.

It will spend more money on the acquisition of high-tech weapons such as interceptors and missiles too, he said.

Cross-border relations have soured since a conservative government took office in Seoul in February last year with a firmer policy towards the North.

Pyongyang has reacted defiantly to a UN Security Council decision on June 12 to impose new sanctions, which tighten a ban on arms shipments among other measures.

It has renounced a truce in force on the peninsula and repeatedly warned of possible war.

"If it becomes clear that North Korea is moving to hit us with nuclear and missile arsenal, we will hit its bases as quickly as possible to prevent launches no matter where they are," an unnamed military official told Yonhap news agency.

"But we don't by any means have any intention of considering a preemptive strike on North Korean bases when there is no clear evidence of an imminent attack," he said.

Officials believe the North will fire short-range or mid-range missiles off its east coast in the next fortnight, after it warned foreign ships to stay clear of a specific area during the period.

Washington has said it is prepared for Pyongyang's possible firing of a long-range missile towards Hawaii.

The military overhaul will cost an estimated 599.3 trillion won ($680 billion) to implement, Yonhap said.