Kim said North Korea would conduct the planned missile launches if the "Yankees persist in their extremely risky reckless actions on the Korean Peninsula and its vicinity" and that the USA should "think reasonably and judge property" to avoid shame, the news agency said.
"The drill will definitely provoke Pyongyang more, and Pyongyang is expected to make a more radical response", it said in an editorial.
Pyongyang tested two intercontinental ballistic missiles (ICBM) last month that appeared to bring much of the United States within range.
Earlier this month, Trump pledged to answer North Korean aggression with "fire and fury".
North Korea views such exercises as preparations for invasion and has fired missiles and taken other actions to coincide with the military drills in the past.
The new rhetoric means the chances of some type of "provocation" from North Korea - such as another missile test or perhaps a cyberattack - are "quite high", said Sung-Yoon Lee, a professor of Korean studies at Tufts University's Fletcher School.
Leader Kim Jong-Un last week delayed the Guam strike plan, but warned it could go ahead depending on Washington's next move.
"We have no intention at all to raise tensions on the Korean Peninsula", Moon said.
During last year's Ulchi drills, North Korea test-fired a submarine-launched ballistic missile that flew about 310 miles in the longest flight by that type of weapon.
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Joint Chiefs of Staff, Joe Dunford, stated the U.S. will not negotiate with China and North Korea to stop the military drills. The war games, details of which are a closely guarded secret, simulate military conflict with the isolated country.
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In recent times, however, calls have been growing for the US and South Korea to suspend their military drills.
"[Mr Kim] said that if the Yankees persist in their extremely unsafe, reckless actions on the Korean peninsula and in its vicinity, testing the self-restraint of the DPRK, the latter will make an important decision as it already declared, warning the U.S. that it should think reasonably and judge properly not to suffer shame that it is hit by the DPRK again".
South Korean army soldiers hold their weapons during an anti-terror exercise carried out as part of Ulchi Freedom Guardian exercise in 2010 What is the US and South Korea Ulchi-Freedom Guardian 10-day military drill?
"What is more serious is the fact that brass hats of the USA military, including the commanders of the US forces in the Pacific and the Strategic Forces, visited South Korea on the eve of the rehearsal", the KCNA said. A little later, the communist country conducted its fifth nuclear test. They could be reduced if North Korea were to pursue denuclearization and cease ballistic missile tests, he said.
It is generally held around this time of year, even using computer simulation exercises.
"The dual freeze approach is China's attempt at buck passing and moral equivalency between US actions and North Korean actions", Hass said.
The annual drill has been held between the two countries since the 1970s and about 17,500 United States troops and 50,000 South Korean troops will participate in the exercises, which will last for about 10 days.
His comments about averting war echoed similar statements he made Tuesday that only South Korea could give consent to initiate any conflict with the North.