The Guardian reports that the sanctions will be reviewed after three months, a diplomat said.
Details of the EU sanctions are still to come but could also include a ban on the country's biggest state-owned banks from selling stock or long-term debt on European markets. The Dutch foreign minister, Frans Timmermans, said on Tuesday that sanctions under consideration on Russian capital markets would have a "far-reaching and immediate effect".
Calls for widened sanctions have gained momentum since the shooting down of Malaysia Airlines flight MH17 over eastern Ukraine, which the US and allies have said was was almost certainly shot down by pro-Russian separatists using a Russian-supplied surface-to-air missile. Russia has denied supplying such a missile.
The US secretary of state, John Kerry, said on Tuesday there's been "no shred of evidence" that Russia is willing to help end the violence and bloodshed between the Ukraine separatists backed by Moscow and the government in Kiev and reiterated further US sanctions could come.
The White House has signaled that the US, which is concerned Moscow could still launch a full-scale cross-border intervention into Ukraine, will follow the EU and escalate sanctions.
"We expect the European Union to take significant additional steps this week, including in key sectors of the Russian economy. In turn, and in full coordination with Europe, the United States will implement additional measures itself," Tony Blinken, a national security adviser to Barack Obama, said on Monday after a video conference call between the US president, and four European leaders: the British prime minister, David Cameron; the French president, François Hollande; Italy's prime minster, Matteo Renzi; and Germany's chancellor, Angela Merkel.