European Ambassadors have agreed in principle to add approximately 15 people and five Crimean-based companies to the Russia sanctions list, diplomats told Reuters.
President Vladimir Putin has hailed the Crimea region joining Russia as he visited the area for the first time since it was annexed from Ukraine in March.
Putin delivered a speech in the city of Sevastopol and watched a parade of Russian navy ships and a flyby of Russian aircraft which marked Victory Day - the World War Two defeat of Nazi Germany.
Ukraine has condemned Putin's visit as trampling on international law and deliberately escalating the crisis.
Russian President Vladimir Putin has attended a Victory Day parade in Sevastopol, Crimea, marking his first visit to the area since it was annexed in March.
His visit to the region is likely to outrage the West and has already been denounced by the Ukrainian government, with the foreign ministry calling it a "deliberate escalation" of the crisis.
Putin flew to Crimea after attending a military parade in Moscow, which was making the anniversary of the World War Two victory over Nazi Germany.
Russian President Vladimir Putin's visit to Crimea is a "deliberate escalation" of the crisis, Ukraine's Foreign Ministry said.
Russian President Vladimir Putin has landed in the Crimean city of Sevastopol, the Kremlin press office said.
His arrival comes on the day of Victory Day parades across the region, which celebrates the Soviet victory in World War Two.
A Victory Day parade celebrating the Soviet victory in World War Two is being held in Donetsk, Ukraine, but Ukrainian flags are nowhere to be seen.
ITV News Europe Editor James Mates has tweeted from Donetsk, Ukraine:
A huge Victory Day parade has been held in Moscow with President Vladimir Putin praising the "iron will of the Soviet people," which saved Europe from slavery.
The military ceremony is held to mark the Soviet victory in World War Two and comes as tensions continue to rise in Ukraine with Russian nationalism high after the annexation of Crimea.
Putin may fly to the city of Sevastopol in Crimea today to take part in the planned Victory Day parade, according to Russian media.
Russia's annexation of Crimea was partly influenced by Nato enlargement in the Black Sea region, Vladimir Putin has said.
The Russian President said the decision to beef up Nato's presence in eastern Europe had meant Russia was "forced to respond".
The killing of protesters in the Ukrainian capital of Kiev took place "under direct leadership" of the country's ex-president Viktor Yanukovich, the head of Ukraine's security service has said.
He added that unidentified Russians were at Ukraine's security service headquarters during the protests.
Russian troops near the Ukrainian border will return to its permanent bases after completing its military exercises, Russia's Foreign Minister Sergei Lavrov has said, calling for a "de-escalation" of rhetoric.
According to Reuters, Mr Lavrov said that he is expecting answers from NATO on the military alliance's activity in Eastern Europe.