North Korea's official KCNA news agency identified the American as Bruce Byron Lowrance and said that he had told his captors that he was controlled by the CIA.
The North hasn't publicly tested any weapons since November 2017, but in recent days Pyongyang reportedly expressed anger at USA -led global sanctions and ongoing small-scale military drills between South Korea and the United States.
However, the understated announcement was more likely aimed at reassuring the North Korean military rather than trying to torpedo diplomatic talks, said Choi Kang, vice president of the Asan Institute for Policy Studies in Seoul.
North Korea on Friday said it will deport an American citizen it detained for illegal entrance, an apparent concession to the United States that came even as it announced the test of a newly developed but unspecified "ultramodern" weapon that will be seen as a pressuring tactic by Washington.
The 22-year-old was jailed in the North for more than a year and was released in a comatose state in 2017 but died shortly after returning home.
North Korean leader Kim Jong-un has visited the test site of a new tactical weapon in his first public "field inspection" since a year ago, hailing it as a "display of our rapidly-growing defence capabilities", according to state media. Kim's attendance at the next ASEAN-South Korea commemorative summit can be a game changer in the global efforts to end the Korean nuclear crisis and to help North Korea rebuild a normal life and the world achieve a lasting peace.
State-run KCNA news agency said Kim Jong-un had supervised the successful test, though it did not reveal details of the new "state-of-the-art" weapon.
"It's North Korea-style coercive diplomacy".
Earlier this month, North Korea's Foreign Ministry warned it could bring back its policy of bolstering its nuclear arsenal if it doesn't receive sanctions relief. South Korea's Transportation Ministry said North Korea on Friday proposed connecting worldwide air routes along the western and eastern coasts of the peninsula during working-level talks on aviation cooperation.
Israeli coalition on brink after 'capitulation' in Gaza
The ruling coalition still holds a slender majority of 651 to 59 in the Knesset (Israeli Parliament) after Beiteinu's departure. We will dictate the time and circumstances that are right for Israel and are right for the security of our people.
Global weapons experts said the officials included a leader of the artillery corps of the Korean People's Army. But nuclear diplomacy has reported no major breakthrough since the Kim-Trump summit, the first such meeting between North Korea and the United States.
The US Vice President Mike Pence told reporters after meeting South Korean President Moon Jae-in that both leaders had been discussing a second meeting ever since their June summit in Singapore.
But Friday's report from the North was noticeably less belligerent than past announcements of weapons tests, and didn't focus on North Korean claims of US and South Korean hostility.
It is rare for North Korea to release an American detainee so swiftly and it comes amid stalled negotiations over Pyongyang's nuclear programme.
United States vice president Mike Pence, attending a Southeast Asian summit in Singapore, cited the "great progress" made on North Korea but said more had to be done.
He said: "We're going to keep the pressure on".
South Korea's defense ministry said it did not have an immediate comment but was preparing a statement on the North Korean test.
The news, which came nearly a year after Pyongyang's last test of an intercontinental ballistic missile, recalled the repeated announcements of 2017.