On Thursday morning, the day after the North said it was severing the line, South Korean workers were able to cross the border and enter the industrial zone, the semiofficial South Korean news agency Yonhap reported, citing the Immigration and Quarantine office in Paju, near the border.
An initial group of 197 workers went over the border at 8:30 a.m. local time (7:30 p.m. Wednesday ET) after North Korea gave the regular approval for their movement by phone through the industrial district's management committee, Yonhap said.
A total of 530 South Koreans were due to enter the Kaesong complex on Thursday, and 511 are scheduled to come back into South Korea, according to Yonhap.
A symbol of North-South cooperation, the Kaesong complex is also seen as an important source of hard currency for the regime in Pyongyang.
The North previously cut off the Kaesong military hotline in March 2009 -- also during annual U.S.-South Korean military exercises -- but later reinstated it, according to Yonhap.
The slew of recent fiery rhetoric from Pyongyang has included threats of pre-emptive nuclear strikes against the United States and South Korea, as well as the declaration that the armistice that stopped the Korean War in 1953 is no longer valid.
On Tuesday, the North said it planned to place military units tasked with targeting U.S. bases under combat-ready status.
Most observers say North Korea is still years away from having the technology to deliver a nuclear warhead on a missile, but it does have plenty of conventional military firepower, including medium-range ballistic missiles that can carry high explosives for hundreds of miles.
The heightened tensions on the Korean Peninsula came after the North carried out a long-range rocket launch in December and an underground nuclear test last month, prompting the U.N. Security Council to step up sanctions on the secretive regime.