The Australian government on Thursday said North Korea will no longer be allowed to re-open its embassy in Canberra after the rogue nation conducted a nuclear test last month.

The move comes as the United Nations Security Council finalises tougher sanctions to be imposed against the regime.

Pyongyang in January said it was seeking to re-open its Australian post which was shuttered in 2008, apparently due to financial constraints, and the move was at the time welcomed by Foreign Minister Bob Carr.

But in a diplomatic about-turn, Canberra has now decided it does not want the North Koreans on its territory.

"The proposal to reopen a North Korean embassy is not currently progressing, Carr's office told AFP.

"This is in response to their recent nuclear test."

When Pyongyang approached Canberra about reopening the post, Carr said it would allow Australia to help focus attention on "catastrophic" rights abuses in the impoverished country. His office said the rationale still had merit.

"There is some merit in the idea of a North Korean embassy in Australia," Carr's spokesman said.

"It would among other things allow us to communicate more directly with them on human rights.

"But it is in abeyance until further notice while we work in the United Nations Security Council on the response to North Korea's recent nuclear activity."

The UN Security Council is expected to adopt tougher sanctions against the North this week, likely to target the illicit activities of North Korean diplomats, banking relationships and bulk cash transfers.

Australia and North Korea agreed to establish diplomatic relations in July 1974 and Pyongyang's embassy opened in Canberra in December of that year, while an Australian mission opened in North Korea in 1975.

However, Pyongyang withdrew its embassy and expelled the Australians six months later without explanation and it took until 2000 for diplomatic relations to be restored.

North Korea re-opened its Canberra embassy in May 2002 before pulling out in 2008.