Industry analysts say the "Arirang", built around Google's Android OS, is likely manufactured in neighbouring China, however.
The existence of the phone, named after a famous Korean folk song, came to light during a factory inspection by North Korean leader Kim Jong-Un at the weekend.
During the tour, Kim was given a detailed briefing on the "performance, quality and packing of the Arirang hand phone," Pyongyang's official Korean Central News Agency (KCNA) reported.
Some analysts suggest the "Arirang" is aimed at getting North Koreans to use an officially-approved phone that can be properly monitored.
Cell phones were introduced in 2008 through a joint venture with the Egyptian telecom firm Orascom, which says there are now two million users in North Korea.
A domestic Intranet was launched in 2002 and some state bodies have their own websites.
It is a natural progression for an impoverished country desperate for investment, but in North Korea the economic imperative is always weighed against the potential for social disruption.
Subscribers to the sole cell phone system provider, Koryolink, can call each other, but not outside the country.
Access to the full-blown Internet is for the super-elite only, meaning a few hundred people or maybe 1,000 at most.
For all the regime's efforts, the information barrier erected around North Korea has, in recent years, begun to lose some of its prophylactic power.
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