The security breach apparently occurred a few years before the current spike in tensions over North Korea's alleged sinking of a South Korean warship in March which killed 46 sailors. The former spy, who worked for South Korea in the 1990s, has been arrested and accused of passing military secrets to the North between 2005 and 2007, the newspaper said.
It said the former spy had served in the military and met the general there, but gave no further details about their relationship.
Officials at the Defense Security Command and the National Intelligence Service confirmed that the general was being investigated in the case. The officials, speaking on customary condition of anonymity, declined to give further details about the probe because it was ongoing.
There's a long history of espionage between the Koreas. Another recent case involved two agents from the North who entered the South posing as defectors. Their alleged mission was to kill the highest-profile North Korean defector, Hwang Jang-yop, in Seoul.
On Friday, the agents, arrested in April, were indicted by the Central District Prosecutors' Office in Seoul, the Yonhap news agency said.
Officials at the prosecutors' office did not immediately comment on the report.
North Korea denies involvement in the sinking of the Cheonan warship, which has highlighted the South Korean military's need to sharpen its defenses. South Korea plans to hold military drills with the U.S. in the Yellow Sea -- off South Korea's west coast -- in the middle of this month, followed by anti-submarine drills with the U.S. in either late June or early July, the Defense Ministry said.
The United States is considering dispatching the aircraft carrier USS George Washington to the area where the Cheonan sank, U.S. defense officials have said.
In Geneva this week, North Korean Deputy Ambassador Ri Jang Gon repeated threats that current tensions could easily explode into armed conflict.
"The present situation of the Korean peninsula is so grave that a war may break out any moment," he said at the 65-nation Conference on Disarmament.
North Korea's Foreign Ministry on Friday repeated its demand that North Korean inspectors be allowed to visit Seoul and review the results of a multinational investigation into the Cheonan's sinking.
The ministry also hinted that North could take "the toughest retaliation" if the U.S. and its followers take the matter to the U.N. Security Council, the North's official Korean Central News Agency said. The report didn't spell out how Pyongyang might retaliate.
The ongoing tensions were widely expected to give South Korea's ruling party -- which supports a tough policy on North Korea -- a boost in local elections Wednesday. But President Lee Myung-bak's party won only six of 16 key mayoral and gubernatorial posts.
North Korea relished the defeat. "The election results are the South Koreans' stern punishment and an iron hammer against the party of Lee Myung-bak's traitors who are running amok," its official Korean Central News Agency said late Thursday.