The US has hit Russia with wide-ranging sanctions over what President Joe Biden called "the beginning of a Russian invasion of Ukraine", BBC reports.
"We've cut off Russia's government from Western financing," Biden said.
It came after Russian politicians authorised President Vladimir Putin to send troops into two rebel-held parts of eastern Ukraine.
Russia has recognised the regions as independent - a move Ukraine said attacks its sovereignty.
Western nations largely see the action as a pretext for a wider invasion. On Monday Mr Putin ordered soldiers into the breakaway Donetsk and Luhansk regions, to "keep the peace" - a description the US called "nonsense".
Satellite imagery over the past 24 hours has shown several new troop and equipment deployments in western Russia, and more than 100 vehicles at an airfield in Belarus near Ukraine's border, according to US space technology company Maxar.
Russia's military has not commented, and it is not clear if any Russian troops have yet been sent into eastern Ukraine.
Announcing his "first tranche" of measures directly targeting the Russian state, Biden said on Tuesday: "To put it simply, Russia just announced that it is carving out a big chunk of Ukraine."
The moves include sanctions on Russia's foreign debt, meaning the country can no longer raise money for its state financing from Western financial institutions.
The US is also punishing high-ranking "elites" from Russia.
"They share the corrupt gains of the Kremlin policies, and should share in the pain as well," Biden said.
The US had already banned American companies from dealing with the rebel-held Ukrainian regions of Donetsk and Luhansk - but few companies do.
The UK and European Union also announced a wave of sanctions against Russian banks and individuals earlier on Tuesday.
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