The EU has imposed sanctions on another 12 individuals over Russia's annexation of Crimea from Ukraine.
The EU said any further steps by Russia to destabilise Ukraine would have "far-reaching consequences".
President Barack Obama also announced further US sanctions as Moscow prepares to finalise the treaty taking Crimea into the Russian Federation.
The EU and Ukraine will on Friday sign parts of the accord that sparked the country's deadly unrest in November.
EU leaders will sign political elements of the Association Agreement with Ukraine's interim PM Arseniy Yatsenyuk in Brussels.
Pro-Moscow President Viktor Yanukovych's abandonment of the deal led to deadly protests, his removal in February and Moscow taking over the predominantly ethnic Russian Crimea region.
Crimea voted to join Russia in a referendum deemed illegal by Kiev and the West.
The treaty joining Crimea to Russia has been approved by Russia's lower house of parliament - the Duma - and is expected to be ratified by the upper house on Friday.
Broader sanctions threat
Earlier this week, the EU announced asset freezes and travel bans against 21 individuals in Russia and Ukraine. At the same time the US ordered similar sanctions against 11 individuals.
The names of the latest individuals to be targeted by the EU will be made public on Friday.
Following a summit of EU leaders in Brussels on Thursday evening, European Council President Herman Van Rompuy described Russia's annexation of Crimea as "a clear violation of Ukrainian sovereignty and of international law".
"We strongly condemn the unconstitutional referendum in Crimea. We will not recognise the annexation, nor will we recognise it in the future," he said.
"There is no place for the use of force and coercion to change borders on the European continent in the 21st Century."
Mr Van Rompuy said that the 28-nation bloc was also cancelling an EU-Russia summit in June and member states would cancel regular bilateral summits.
"We make clear that failure to settle the crisis peacefully, and any steps by Russia to destabilise Ukraine, will have far-reaching consequences - and by that we mean consequences on relations in a broad range of economic areas," he added.
The European Council on Friday published its Conclusions on Ukraine, saying the EU would initially sign the political elements of the Ukraine Association Agreement and was committed to signing the remainder.
The EU also plans to sign association agreements with Georgia and Moldova by June. Correspondents say this will further irritate Russia - as Moscow has troops in breakaway parts of Georgia and in Trans-Dniester, which broke away from Moldova.
German Chancellor Angela Merkel said the European Commission - the EU's executive - had been asked to prepare broader economic sanctions against Russia if the Ukraine crisis escalated.
"We asked the commission today to look at... very broad-based possible economic sanctions, and to prepare the ground for these sanctions," she said.
Leaving the summit, British Prime Minister David Cameron said the EU was sending a "clear, strong and consistent message".
"It has been hard work but we've made some real progress," he said.
Russian Foreign Minister Sergei Lavrov said on Friday the international sanctions were "absolutely unlawful".
Two ratings agencies have now downgraded Russia's credit rating outlook to negative from stable.
However, Russian Deputy Finance Minister Alexei Moiseev said on Friday: "For now, I see no severe consequences for the financial sector."
Correspondents say the dispute over Crimea is expected to dominate President Obama's visit to Europe next week.
He will chair a meeting of the G7 group of seven leading economies - pointedly leaving out Russia which would normally make it the G8.
Washington's latest measures target a further 20 people closely associated with Russian President Vladimir Putin, as well as a bank, Rossiya, controlled by his allies.
In response, Russia said it was imposing its own sanctions against US officials and politicians.
Meanwhile, Moscow has been tightening its grip on Crimea.
On Thursday, Russian-allied troops took over at least two Ukrainian navy ships at anchor in the port of Sevastopol.
A Ukrainian defence ministry spokesman said at least 15 men were involved in the assault.
Pro-Russian forces effectively took over Crimea after President Yanukovych fled Kiev on 22 February following protests in which more than 80 people were killed.