Public buildings throughout the country, including government offices, department stores, shopping malls, bus terminals and schools emptied simultaneously as the 20-minute exercise began at 1030 IST.
In Seoul City Hall, smoke-belching cannisters were set off in the main lobby as staff streamed out of the building, covering their mouths and noses with cloths.
Outside, they watched first response teams giving CPR demonstrations.
South Korea has held mass civil emergency drills -- largely connected to the risk of attack by North Korea -- for decades, but a spokesman for the National Emergency Management Agency (NEMA) said today's exercise was the first of its kind.
Close to 300 people were killed and the response of the government and emergency services came in for intense criticism, prompting President Park Geun-Hye to announce that the national coastguard would be disbanded.
The NEMA spokesman said today's drill was aimed at honing emergency response times to a major fire, with a particular focus on the "golden hour" -- the time period following traumatic injury during which there is the highest likelihood that prompt medical treatment will prevent death.
With public confidence shattered by the Sewol tragedy, President Park vowed a complete overhaul of national safety practises, which critics said had been sidelined in the drive for economic development.
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