The new missile, if confirmed, would be the longest-range weapon in South Korea's arsenal.
Missile-range limits have been agreed upon under an accord with the US, which has cited concerns over a possible regional arms race.
The surface-to-surface missile will be deployed along the border with North Korea beginning this year, the newspaper said.
It has a 450kg payload and can hit within 2m of its target, the report said.
Despite the agreement with the US, South Korea can develop long-range cruise missiles as long as the payload is under 500kg.