French Foreign Minister Jean-Yves Le Drian confirmed on Tuesday that EU sanctions against Russia had been "unanimously agreed to" by the bloc's top diplomats.
EU foreign affairs chief Josep Borrell said the raft of penalties "will hurt Russia, and it will hurt a lot.''
The measures will target the 351 lawmakers who voted in favor of the recognition, along with 27 individuals and entities who threaten Ukrainian territory and sovereignty, Borrell said.
These include figures from Russian business, media and politics, what Borrell referred to as "oligarchs."
A draft proposal of the sanctions said all those who were involved in the "illegal decision" in Ukraine would be personally targeted by sanctions.
Banks financing the Russian military and other operations in those territories are also included.
The measures will now be formally approved by Brussels as part of the EU's response to Russian President Vladimir Putin's recognition of two breakaway regions in eastern Ukraine. Putin himself was not on the sanctions list.
"Our action today is a response to Russia's aggressive behavior," European Commission President Ursula von der Leyen said of the sanctions.
"If Russia continues to escalate this crisis that it has created, we are ready to take further action in response", she added, also stressing the need for the EU to be less dependent on Russia for gas.
Putin's announcement on Monday was followed by his signature on a decree on the deployment of Russian troops to Donetsk and Luhansk, which he called "peacekeepers." The move drew international condemnation.
The EU had warned there would be "massive consequences" for Russia's economy if Moscow invaded Ukraine.
Earlier on Tuesday, Germany halted the approval process for the Nord Stream 2 gas pipeline from Russia.
The US has announced a "first tranche" of sanctions targeting Russian entities and individuals. The UK also said Tuesday it would sanction three wealthy individuals and five banks.
"The European Union, the UK and the US aim to closely coordinate their sanctions for maximum leverage," said DW's Brussels correspondent Bernd Riegert.
"The aim is to simultaneously target Russian oligarchs in Cyprus, in the City of London and in US tax havens, hitting them where it hurts," he added.
In Brussels, European Commission Spokesperson Eric Mamer said that Russia had chosen the route of escalation, adding that Europe had to react, to make sure that Russia was stopped, while continuing to seek diplomatic paths.
How will the sanctions work?
The EU said it aims to thwart the Russian government's ability to access the EU capital, financial markets and services, and for Western financial markets to cease trading in Russian bonds.
Hundreds of Russian individuals will be unable to enter the EU and their bank accounts will be frozen.
Additionally, trade from Donetsk and Luhansk with the EU will also be targeted.
France, which currently holds the rotating EU presidency, said that the package could enter into force as early as Wednesday.
The French Presidency said Tuesday evening that the necessary technical and legal checks would be carried out overnight, and formal adoption and publication in the official journal of the EU is planned for Wednesday.
More sanctions possible
The EU is also considering an additional round of sanctions with harder measures targeting the Russian economy as a whole along with oligarchs.
The sanctions will likely only come into effect if Russia moves troops past what is known as the "line of contact" dividing the separatist-held parts of the provinces with the area controlled by Ukraine. Diplomats in Brussels said the EU would regard crossing that line as an "invasion" of Ukraine.
However, the EU has so far refrained from making the package public.
"There are also sanctions in our reserve too," Le Drian said, "If ever Russia decides it wants to go further."
es,jcg/nm,wmr (dpa, AFP)