South Korean officials said a missile launched near the port of Wonsan flew about 450 km and reached an altitude of 910 km, before landing in the Sea of Japan, the BBC reported on Wednesday.
South Korea's National Security Council expressed concern about the test and said it was placing "weight on the possibility" that it was a submarine launched ballistic missile (SLBM), South Korea's Yonhap news agency reported.
If confirmed, this would be a significant escalation from the short-range tests it has conducted since May.
The news sparked swift condemnation.
Japanese Prime Minister Shinzo Abe said it was a violation of United Nations Security Council (UNSC) resolutions which ban North Korea from the use of ballistic missile technology, the BBC reported.
Just hours earlier, Pyongyang had said denuclearization talks with Washington could finally resume later this week.
Negotiations have been stalled since the Hanoi summit between US President Donald Trump and North Korean leader Kim Jong-un in February ended without an agreement.
Experts said the proximity of the test and the talks announcement was deliberate.
"North Korea wants to make its negotiating position quite clear before talks even begin," Harry Kazianis of the Center for the National Interest in Washington DC told a media outlet.
"Pyongyang seems set to push Washington to back off from past demands of full denuclearization, for what are only promises of sanctions relief."
The first reports came in the early hours of the morning when authorities reported that two missiles had been launched, with at least one landing in Japanese waters.
Later, Japan's Chief Cabinet Secretary Yoshide Suga said at a news conference that one ballistic missile may have split into two before falling into the water.
This would be the 11th missile test from North Korea this year, but authorities have expressed particular concern at the apparent range and capabilities of this one.
North Korea had been developing submarine-launched ballistic missiles technology for some time before it halted all long-range missile testing.
The last SLBM tested by the North is thought to have taken place in August 2016, before President Trump even took office.
Two years later, President Trump and Kim Jong-un made history by becoming the first sitting US president and North Korean leader to meet.
But despite two further face-to-face meetings there has been little progress towards any agreement on what to do about the North's nuclear capabilities.
( With inputs from IANS )