Application of an electric stimulus to a material with a metal-insulator transition can trigger a large resistance change. Resistive switching from an insulating into a metallic phase, which typically occurs by the formation of a conducting filament parallel to the current flow, is a highly active research topic. Using the magneto-optical Kerr imaging, we found that the opposite type of resistive switching, from a metal into an insulator, occurs in a reciprocal characteristic spatial pattern: the formation of an insulating barrier perpendicular to the driving current. This barrier formation leads to an unusual N-type negative differential resistance in the current-voltage characteristics. We further demonstrate that electrically inducing a transverse barrier enables a unique approach to voltage-controlled magnetism. By triggering the metal-to-insulator resistive switching in a magnetic material, local on/off control of ferromagnetism is achieved using a global voltage bias applied to the whole device.