"A meeting of the political bureau of the central committee of the workers' party decided to relieve Ri Yong-ho of all his posts for his illness," the report said.
Ri will also no longer serve as vice-chairman of the central military commission of the Workers' Party of Korea, it added.
Daniel Pinkston, senior analyst at the International Crisis Group, told The Daily Telegraph from Seoul that Ri's fate may have been sealed as far back as April, when the fourth Party Conference failed to confer any promotions on him while others received a range of new titles.
"Being passed over like that indicates he was being reigned in," he said.
Ri previously paid a state visit to Cuba during which he made bombastic statements that North Korea would fight alongside Cuban troops to defeat the American "imperialists" and there was apparently concern back in Pyongyang that he was overstepping his bounds.
"A dictator has to put mechanisms in place to prevent coups and challenges to his power," said Pinkston. "This will not only have been aimed at this individual but it will also serve as a signal to others."
An alternative suggestion is that Ri may have actively been plotting against Kim's fledgling regime, although that is difficult to prove from outside the borders of the reclusive state.
"In these sort of dictatorships, purges are used as a policy instrument and designed to send the chilling message that the regime is willing to take action," said Pinkston. "And that is even more chilling when the person is one of the most senior members of the inner circle."
If Ri does not resist his demotion, he is likely to be able to take an "honourable retirement," but if he opposes the decision he is likely to imprisoned in North Korea's infamous gulag system.
"And if he was actively plotting against Kim, then he and his family will face serious retribution," Pinkston said.
Ri's fall from grace sends the signal that Kim is "in full control" in Pyongyang, he added, and that no-one is in a position to challenge his authority.
