Quoting an unnamed government source, Yonhap cited "credible intelligence" that North Korean leader Kim Jong-Un had ordered the launch of a satellite to mark the 70th anniversary of the founding of the North`s ruling Workers` Party on October 10.
"We think (the North) will carry out a provocation around the 70th anniversary," the source said.
The South Korean Defence Ministry declined to confirm or deny the Yonhap report.
"As to the construction of North Korea`s long-range missile launching facilities, we`ve been watching the North`s moves very closely," a ministry spokesman said.
According to the Yonhap source, North Korea has completed work on an extended 67-metre (220-foot) gantry capable of handling a rocket twice the size of the 30-metre Unha-3 rocket launched in December, 2012.
The Unha-3 launch was widely condemned overseas as a ballistic missile test and triggered additional UN sanctions.
North Korea, which insisted the launch was purely scientific in nature, responded three months later by conducting its a third nuclear test -- the most powerful to date.
North Korea is banned under UN Security Council resolutions from carrying out any launch using ballistic missile technology, although repeated small-range missile tests have gone unpunished.
The upgrading of facilities at the Sohae launch centre have been closely monitored by satellite imagery analysts at the US-Korea Institute at Johns Hopkins University.
In a recent report, the institute estimated that an October 10 launch would be "difficult although not impossible".
North Korea, meanwhile, has made its intentions very clear.
Visiting a newly-built satellite command centre in May, Kim Jong-Un had vowed to push ahead with further satellite launches despite the sanctions threat.
"Space development can never be abandoned, no matter who may oppose it," Kim said.
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