The move came after army chief Ri Yong-Ho was removed from his post due to "illness" and the little-known Hyon Yong-Cho promoted to vice marshal, paving the way for him to take over as head of the military.
Analysts said the new title underlined Jong-un's efforts to reinforce control over the 1.2-million-strong military. The new leader, who is in his late 20s, has made a series of visits to military units since his father died in December.
"A decision was made to award the title of Marshal of the DPRK [North Korea] to Kim Jong-Un, supreme commander of the Korean People's Army," the official Korean Central News Agency (KCNA) said.
The title of Marshal was held by both Jong-un's father, Kim Jong-il, and his grandfather Kim Il-sung, the North's founding father.
Gripping to power
Il-sung was promoted to generalissimo in 1992, two years before his death of a heart attack, while Jong-Il was posthumously awarded the same title in February.
"By donning the mantle worn by the two Kims, Jong-un is projecting an image as a legitimate successor to the throne and tightening his grip on power," Professor Kim Yong-Hyon of Dongguk University said.
With Hyon promoted to vice marshal on Monday, Jong-un, who was made a general in September 2010, apparently needed a new rank befitting the supreme commander of the military, Cheong Seong-Chang of the Sejong Institute said.
"This is the only title left for Jong-un to decorate himself with after he assumed almost all party and army positions," he said.
South Korean President Lee Myung-Bak chaired a high-level security meeting on Wednesday and ordered officials to closely watch the situation in the nuclear-armed North.
The South's defence ministry said there was no visible change in North Korean military activities along the tense border.
Chinese foreign ministry spokesperson Hong Lei described China and the North as "friendly neighbours".
"We wish for the smooth development of North Korea under the leadership of Kim Jong-Un and the Workers' Party of Korea," he said after news of the new title.
Ri's departure took many observers by surprise, with widespread scepticism over the official reason given.
Some analysts said Jong-un has been purging aged military leaders, including former armed forces minister Kim Yong-chun, and U Dong-chuk who ran the secret police.
"The recent changes are all part of his efforts to speed up generational changes in the military and keep the military on a short leash," said Chang Yong-seok of the Institute for Peace and Unification.
'Out of proportion'
"Granting Jong-un the title of the country's Marshal will help allay concerns over his grip on power."
Professor Yun Duk-min of the Korea National Diplomatic Academy said the military's clout had grown out of proportion under the "Songun", or military-first, policy of Jong-un's father.
It has been actively engaged in farming, fishing and civilian construction projects while controlling most of North Korea's trade, reported to be $6.3-billion last year.
"Attempts were made recently to take profitable business projects away from the hands of the military and return them to the government," a South Korean foreign ministry official told the Joongang Ilbo daily.
"Effective control over the military will be crucial in the North's efforts to improve people's livelihoods."
KCNA said North Koreans were filled with joy on hearing the news of Jong-un's new title. "All people throughout the country have taken the news as the nation's great auspicious event," it said. – AFP