North Korea and South Korea have failed to reach agreement on reopening the jointly-run industrial estate of Kaesong.
South Korean officials added that more talks on Kaesong are scheduled for Wednesday, the BBC informs.
Work at Kaesong has been suspended since mid-April, when North Korea withdrew its workers.
The move came amid high tensions after Pyongyang's February nuclear test.
The Kaesong complex, located just inside North Korea, is home to more than 120 South Korean factories which employ some 53,000 North Korean workers.
The Koreas agreed in principle earlier in July to restart operations.
Tensions rose sharply on the Korean Peninsula in December after North Korea tested a Taepodong 2 long-range missile and again on February 12 when it carried out its third nuclear test. The UN hit back with sanctions, and the start of joint military drills between South Korea and the United States in March further irritated the North, which threatened to carry out a nuclear attack on the US mainland, as well as on US forces in the region.