The Prime Minister is suspending high-level contacts with Russia and that 23 Russian diplomats will be expelled from the UK in response to the nerve agent attack on ex-spy Sergei Skripal in Salisbury earlier this month.
The diplomats were identified as "undeclared intelligence officers" and have been given "just one week to leave" by Theresa May.
Speaking to the House of Commons, Mrs May added that dignitaries, including members of the royal family, will not attend this summer's World Cup.
"We will not tolerate the threat to life of British people and others on British soil from the Russian government," the Prime Minister said.
"Nor will we tolerate such a flagrant breach of Russia's international obligations."
She welcomed support from allies including the US, NATO and the EU, and said Britain would be pushing for a "robust international response" at the UN Security Council later on Wednesday.
"This was not just an act of attempted murder in Salisbury - nor just an act against UK," said Mrs May.
"It is an affront to the prohibition on the use of chemical weapons. And it is an affront to the rules-based system on which we and our international partners depend."
Russia had failed to provide any "credible" explanation of events and of why it has "an undeclared chemical weapons programme in contravention of international law", she said.
She added that the UK will urgently prepare new powers to detain people suspected of hostile state activity at the border, as well as introducing possible counter espionage systems.
In a display of unconcern about Mrs May's actions, the Russian Embassy in London tweeted: "The temperature of Russia-UK relations drops to minus-23, but we are not afraid of cold weather."
They have released a statement in response to the British Government's actions, saying:
"On March 14 Russian Ambassador Alexander Yakovenko was summoned to the Foreign and Commonwealth Office where he was informed that 23 diplomats were declared personae non gratae.
"We consider this hostile action as totally unacceptable, unjustified and shortsighted.
"All the responsibility for the deterioration of the Russia-UK relationship lies with the current political leadership of Britain".
'There is more potential for miscalculation and accident now' - Sir Adam Thomson, Director, European Leadership Network, former NATO Ambassador.
NATO said the UK had briefed its North Atlantic Council on Wednesday about the Skripal attack.
A statement said:
"Allies expressed deep concern at the first offensive use of a nerve agent on Alliance territory since NATO's foundation.
"Allies expressed solidarity with the UK, offered their support in the conduct of the ongoing investigation, and called on Russia to address the UK's questions including providing full and complete disclosure of the Novichok programme to the Organisation for the Prohibition of Chemical Weapons.
"Allies agreed that the attack was a clear breach of international norms and agreements.
"NATO regards any use of chemical weapons as a threat to international peace and security."
Earlier, Mrs May blamed Russia for the Salisbury attack after it was discovered the nerve agent Novichok was developed in Russia and framed the poisoning as a possible "unlawful use of force".
Shortly after the deadline expired, the Russian Embassy in London reiterated that Moscow will not respond to Britain's ultimatum until it's given access to samples of the chemical substance used in the attack.
At a meeting of the UN Security Council called to discuss the incident in Salisbury, the US ambassador to the world body, Nikki Haley, expressed solidarity for Britain:
"The United States believes that Russia is responsible for the attack on two people in the United Kingdom using a military-grade nerve agent. Dozens of civilians and first responders were also exposed.
"No two nations enjoy a stronger bond than that of the United States and the United Kingdom. Ours is truly a special relationship.
"When our friends in Great Britain face a challenge, the United States will always be there for them. Always.
"If we don't take immediate concrete measures to address this now, Salisbury will not be the last place we see chemical weapons used.
"They could be used here in New York, or in cities of any country that sits on this council. This is a defining moment."
The Russian permanent representative to the UN, Vassily Nebenzia, said: "We demand that material proof be provided of the allegedly found Russian trace in this high-resonance event.
"Without this, stating that there is incontrovertible truth is not something that we can take into account."
"This is not worth going to war over" -Hamish De Bretton Gordon, former Commander of the Chemical, Biological Radiological and Nuclear Regiment.