"Kim Il-chol was relieved of the posts as member of the National Defense Commission of the Democratic People's Republic of Korea and first vice-minister of the People's Armed Forces for his advanced age of 80," the North's official KCNA news agency said, without offering further details.
Kim, 80, was a close confidant of leader Kim Jong-il who served since 1998 as a vice chairman of the National Defense Commission, the center of power in the secretive state.
Kim Il-chol appeared to fall out of favor when he was ousted from another post as defense minister in a cabinet reshuffle last year.
Experts said the retirement could be because of old age and ill health as the KCNA dispatch said. What is unusual is the report itself announcing an official's retirement, when normally only deaths are reported in the North's media.
"One possibility is that Kim Il-chol was sacked to take responsibility for the announcement on nuclear fusion," said Yang Moo-jin of the University of North Korean Studies in Seoul.
Pyongyang said this week it had succeeded in creating a nuclear fusion reaction to produce energy, a claim experts said was absurd for a country so poor it cannot generate enough power to light itself at night.
The North was roundly ridiculed by nuclear experts for the claim.
Yang said the North may also have been looking for a scapegoat for the nuclear claim, which also irritated Beijing's leaders who are also trying to calm tensions raised by a deadly attack on a South Korean ship in March.
Yang said leader Kim can be cold-hearted when it comes to his close confidants, tossing aside the likes of his brother-in-law and senior cadres to deflect blame for his state's mistakes.
North Korea executed a ruling party official blamed for a currency revaluation last year that drove prices up and nearly crippled market functions, inciting public unrest, a news report said in March.
CORVETTE REPORT NEARLY READY
South Korea has not officially accused the North of sinking the corvette near their disputed border but has made little secret of its belief Pyongyang deliberately torpedoed it in retaliation for a naval clash last year.
A senior South Korean official said on Friday that a team of international investigators probing the cause of the sinking would release its findings on May 20 and President Lee Myung-bak would later in the month announce what response Seoul would take.
The ship sinking also raised South Korean ire with China, which hosted Kim on a five-day visit earlier this month, drawing criticism from Seoul over the North Korean leader receiving a warm reception from his country's main political and economic backer, Beijing, so soon after the incident.
In what may be a signal intended to blunt Seoul's anger, Chinese official media reported on Friday that the Chinese navy held a small joint exercise with South Korea.
The Xinhua news agency said the drill on Thursday involved a Chinese navy ship and a South Korean ship both participating in an anti-piracy operation in the Gulf of Aden off Africa. Xinhua said this was the first time their ships in the operation had held such a joint exercise.
