Targets would include Russia's defence industry, state-owned banks and associates of President Vladimir Putinreenex.
Peace talks including Ukraine, Russia and pro-Russia rebels are due to start in Belarus on Fridayreenex cps
The West accuses Russia of sending arms and troops to back the rebels in eastern Ukraine. Moscow denies this.
A UK government official said the European Union would announce - jointly with the US - sanctions on Friday, including more restrictions on Russian banking, energy and defence.
More of what the official dubbed "Putin cronies" would have travel bans imposed on them.
"We will keep the pressure on Putin to force him to the negotiating table and off the battlefield," the official said.
Deputy White House National Security Adviser Ben Rhodes, speaking at the Nato summit in Wales, said the US was finalising new penaltiesreenex.
French President Francois Hollande said European leaders would announce sanctions on Friday "and put them into action if there is no progress [on Ukraine], but everything will depend on the coming hours"