The statement from the North's space technology agency came amid international concern the communist nation is gearing up to fire its most advanced Taepodong-2 missile, which would violate a U.N. Security Council resolution.
Last week, the country said it has the right to "space development." North Korea has in the past used terms like "space development" or "satellite" to disguise a missile test. When it test-fired a Taepodong-1 ballistic missile over Japan in 1998, it claimed to have put a satellite into orbit.
"Full-fledged preparations are under way to launch the pilot communications satellite Kwangmyongsong No. 2" at the launch site in Hwadae in the country's northeast, the North's agency said in a statement, carried by Pyongyang's official Korean Central News Agency.
Hwadae is widely believed to be the launch site for the North's longest-range Taepodong-2 missile, which is believed capable of reaching Alaska. Media reports have suggested the missile being readied for launch could be an advanced version of the Taepodong-2 that could reach even farther, to the U.S. west coast.
South Korea, Japan and the United States have warned Pyongyang not to fire a missile, saying the move would trigger international sanctions and jeopardize Washington's willingness to improve relations with the communist nation.
North Korea is banned from any ballistic missile activity under a U.N. Security Council resolution adopted after the North's first-ever nuclear test in 2006.
North Korea's missile program is a major security concern for the region, along with its nuclear weapons development.
The country test-launched a Taepodong-2 missile in 2006, but it plunged into the ocean shortly after liftoff.
That test alarmed the world and gave new energy to the stop-and-go diplomacy over North Korea's nuclear program, though the North is not yet believed to have mastered the miniaturization technology required to put a nuclear warhead on a missile.