BBC News, photo: Getty Images
Russia's president Vladimir Putin has signed a decree that will exclude Ukraine from a free trade zone that includes former Soviet countries from 1 January.
Ukraine plans to join an EU free trade zone from that date.
Mr Putin cited "extraordinary circumstances affecting the interests and economic security" of Russia.
Tensions between the countries have been high since Russia annexed Ukraine's Crimean peninsula last year.
Kiev and the West have also accused Russia of aiding pro-Moscow separatists in the east of the country.
The decree will annul a Russian deal with Ukraine dating back to 2011, according to the Russian Interfax news agency.
Russia says the Ukraine-EU deal could lead to European imports coming across its own borders.
Meanwhile, the Ukrainian government has said it will ban trade with Crimea in 30 days' time.