The number of newborns stood at 357,700 last year, falling below the 400,000 mark for the first time, according to Statistics Korea, Wednesday.
The figure is also down 48,000 from 2016, the largest drop since 2002.
The average birthrate was 1.05, also the lowest figure since the government started collecting data. The rates in the country's two largest cities _ Seoul and Busan _ were below one.
"This is far worse than we ever anticipated. The demographic cliff scenario is likely to strike Korea earlier than expected," an official from the statistics agency said.
The average age for a woman giving birth to her first baby was 32.6 in 2017, up 0.2 from a year earlier.
In contrast, the mortality rate jumped to a record high last year reflecting the aging society, and indicating the nation is starting to go over the demographic cliff.
Statistics Korea said the number of deaths came in at 285,600 last year, up 4,800 from a year earlier _ or 783 people every day.
The country's net population growth stood at 72,000 last year, also the lowest figure Statistics Korea has seen.
Korea experienced more deaths than births for the first time in December.
The government has said the nation would reach the demographic cliff in 2030, but it after the recent report it may be earlier than projected.