US President Joe Biden announced a "first tranche" of economic penalties against Russia on Tuesday.
The sanctions target Russia's VEB and Promsvyazbank banks. Biden added that sanctions against Russia's sovereign debt meant that "we've cut off Russia's government from Western financing."
The measures would also target Russian "elites," and their family members.
"We have our next move prepared as well, Russia will pay an even steeper price if continues its aggressions," Biden warned.
The US president said Putin is "setting up a rationale to go much further."
"This is the beginning of a Russian invasion of Ukraine," he added.
Although he said the US had "no intention of fighting Russia," Biden ordered additional troops to shore up the Baltic states.
"The United States, together with our allies, will defend every inch of NATO territory," Biden said, adding that he still hopes diplomacy is possible.
A Defense official, speaking on condition of anonymity, said F-35 fighter jets and Apache attack helicopters were also being sent to the Baltic region and to Poland.
The European Union foreign ministers have agreed on sanctions targeting individuals and entities that "undermine Ukrainian integrity" the bloc's foreign policy chief Josep Borrell said.
Borrell said the package "will hurt Russia, and it will hurt a lot.''
French Foreign Minister Jean-Yves Le Drian told reporters after a Paris meeting of the EU's top diplomats that they "unanimously agreed" to the sanctions package.
Earlier on Tuesday, the presidents of the European Council and the European Commission, Charles Michel and Ursula von der Leyen, outlined the possible sanctions on:
• Those involved in the decision to recognize Donetsk and Luhansk as "independent"
• Banks financing Russian military and other operations in eastern Ukraine
• The Russian state's access to the EU's capital and financial markets and services
• Trade from Luhansk and Donetsk to and from the EU
Michel and von der Leyen concluded by emphasizing the EU's solidarity with Ukraine in what is a dire hour for European security, or what the statement by the two European presidents terms "the illegal actions of Russia."
NATO chief warns: Russia still planning 'full-scale' attack
NATO Secretary-General Jens Stoltenberg reiterated warnings that Russia was planning a "further invasion" of Ukraine.
"Every indication is that Russia is continuing to plan for a full-scale attack of Ukraine," Stoltenberg told a news conference.
"We see that more and more of the forces are moving out of the camps and are in combat formations and ready to strike," he added.
Stoltenberg called recent developments a "serious escalation by Russia and a flagrant violation of international law.''
"We continue to call on Russia to step back ... it's never too late not to attack."
