Video footage showed the single-stage rocket, propelled by a liquid fuel engine, lift off from the Naro Space Center on the southern coast and surge into the sky, trailing yellow and blue flames, sg.news.yahoo.com reported.
"The test vehicle was successfully launched," Vice Science Minister Lee Jin-gyu told journalists, adding collected flight data showed the engine was functioning normally.
The rocket, weighing 52 tons and measuring 25.8 meters (84.6 feet) long, was fitted with a single engine with 75-ton thrust, the Korea Aerospace Research Institute (KARI) said.
The engine, designed and developed as part of a $1.8-billion project, will be used to propel the country's first indigenous three-stage launch vehicle – the Korea Space Launch Vehicle-2 (KSLV-2).
Engine combustion lasted for 151 seconds, surpassing an initial goal of 140 seconds, bringing the vehicle to an altitude of 75 kilometers (46 miles) before the engine stopped.
But it continued flying due to inertia, reaching a suborbital altitude of 209 kilometers, 319 seconds after liftoff.
It then splashed down into the ocean 429 kilometers southeast of the southern resort island of Jeju.
"This is a significant step forward in developing a launch vehicle with our own technology," a KARI spokesman said.
It is the first such launch in South Korea since 2013 when the country successfully put a small satellite into orbit following failures in 2009 and in 2010.
But the significance of the 2013 launch was widely discounted as the launch vehicle had to rely on a Russian-developed engine for its first stage.
On its launch – scheduled for 2021 – KSLV-2 will use five of the newly developed engines, a cluster of four for the first stage, another one for the second stage and a small, seven-ton thrust engine for the third stage, Lee said.
Wednesday's test was deemed successful as the engine combustion was maintained for more than 140 seconds during the test launch, he said.
The KSLV-2 rocket, which will be South Korea's first space vehicle wholly designed and built by itself, will be used to place satellites into the Earth's orbit and for other commercial applications.