EU leaders have added 12 more individuals to its sanction list, following talks in Brussels last night.
Senior figures from Moscow have been slapped with sanctions designed to discourage escalation of political tension in Crimea, since Russia's annexation of the region from Ukraine.
At a summit of European Union leaders, which included David Cameron, it was agreed to add 12 names to the list of senior figures from the Moscow regime to face travel bans and asset freezes in response to what the Prime Minister described as "unacceptable" actions by Russia.
Russian armed forces stand guard around military base in Ukraine's Autonomous Republic of Crimea on March 20, 2014
European Council President Herman Van Rompuy said any further steps by Russia to destabilise Ukraine would have "far-reaching consequences".
A trade deal designed to give economic support to the beleaguered state will also be signed today.
US President Barack Obama stepped up action against Moscow by putting billionaire oligarch businessmen - including Vladimir Putin's banker Yury Kovalchuk - on a blacklist of regime figures who will face sanctions from America.
But opposition leader Alexey Navalny - a former candidate for Moscow mayor - said there should also be sanctions against oligarchs who have made a home in the West, like Chelsea FC owner Roman Abramovich.
"Real sanctions, such as blocking access to their plush London apartments, will show that Mr Putin's folly comes with serious costs," wrote Mr Navalny in the New York Times.
After talks which continued into the early hours in Brussels, European Council president Herman van Rompuy announced the decision to extend sanctions against Russian officials, and said that a planned EU-Russia summit in June had been cancelled.
"Russia's annexation of Crimea and of Sevastopol is a clear violation of Ukrainian sovereignty and of international law," said Mr Van Rompuy.
"We strongly condemn the unconstitutional referendum in Crimea. We will not recognise the annexation, nor will we recognise it in the future. There is no place for the use of force and coercion to change borders on the European continent in the 21st Century.
"In the absence of de-escalation from Russia, the European Council has decided to expand the list of individuals subject to visa bans and asset freezes. We put forward a list of 12 names to add to the 21 agreed earlier this week."
Mr Van Rompuy added: "Any steps by Russia to destabliise Ukraine will have far-reaching consequences. By that we mean consequences on relations in a broad range of economic areas. We ask the Commission and the member states to prepare possible targeted measures."
Russia's armed forces have surrounded Ukraine's troops in the Perevalnoye neighborhood in Crimea
Mr Obama's announcement of travel bans and asset freezes was met with a Cold War-style tit-for-tat retaliation by Moscow, which announced its own blacklist of US politicians, including House Speaker John Boehner and former presidential candidate John McCain.
Mr McCain tweeted a defiant response: "I'm proud to be sanctioned by Putin - I'll never cease my efforts & dedication to freedom & independence of Ukraine, which includes Crimea."
Mr Obama signed a presidential order paving the way for measures targeting key sectors of the Russian economy if the situation in Ukraine worsens.
Officials at the Brussels talks stressed that the EU is offering a "carrot" of strengthened economic links with heavily-indebted Ukraine, as well as the "stick" of sanctions.
Elements of an association agreement with Kiev are set to be signed today, four months after former president Viktor Yanukovych stepped away from the deal in a move which eventually led to his overthrow.
As well as the extension of sanctions to more individuals deemed responsible for violations of Ukrainian sovereignty, talks last night focused on preparations for the wider trade and economic measures threatened by the EU if Russia continues to escalate the situation.
One measure under discussion for possible immediate application was a requirement for imports from Crimea to carry a Ukrainian customs stamp, while other countries could agree their own suspension of arms export licences and military co-operation with Russia of the kind announced by Britain earlier this week.
Tensions remained high in Crimea itself, where pro-Russian forces seized three Ukrainian warships and Kiev said its troops were being threatened.
The lower house of Russia's parliament, the Duma, endorsed the absorption of the peninsula into their country by a near-unanimous vote of 445-1.
The blacklist of 20 individuals unveiled by Mr Obama in Washington also included prominent businessman Gennady Timchenko and billionaire brothers Arkady and Boris Rotenberg, who were judo sparring partners of the Russian president, as well as Mr Putin's chief of staff Sergei Ivanov, Duma Speaker Sergei Naryshkin and Russian Railways chairman Vladimir Yakunin.
Members of the Russian armed forces stand guard around the Ukrainian military base in the village of Perevalne
Mr Kovalchuk's Rossiya bank, which counts many senior officials among its clients, was the first institution to face sanctions.
Justifying the move to sanction private businessmen, Mr Obama said he was targeting "individuals with substantial resources and influence who provide material support to the Russian leadership as well as a bank which provides material support to these individuals".
He added: "The world is watching with grave concern as Russia has positioned its military in a way that could lead to further incursions into southern and eastern Ukraine.
"For this reason we have been working closely with our European partners to develop more severe actions that could be taken if Russia continues to escalate the situation.
"As part of that process, I signed a new executive order today that gives us the authority to impose sanctions not just on individuals but on key sectors of the Russian economy.
"This is not our preferred outcome. These sanctions will not only have a significant effect on the world economy, but can also be disruptive to the global economy.
"However, Russia must know that further escalation will only isolate it further from the international community."
Mr Obama is due to meet other G7 states - the UK, France, Germany, Italy, Canada and Japan - to discuss Ukraine on the margins of a nuclear security summit in the Netherlands next week, when proposals to eject Russia from the wider G8 group of world powers will be discussed.