The US-made F-35 Joint Strike Fighter "cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities", she said.
The announcement came five days after Turkey began taking delivery of the Russian missile system, shrugging off warnings from the United States and other North Atlantic Treaty Organisation allies their it could impact their relationship.
"At this point, the Turks have made a decision. We will work forward at this point to unwind the relationship", she said.
The Trump administration has not yet announced what sanctions it will impose against Turkey for the S-400 purchase.
The Pentagon had already laid out a plan to remove Turkey from the program, including halting any new training for Turkish pilots on the advanced aircraft.
Washington has long said the acquisition may lead to Turkey's expulsion from the F-35 program.
The Indian Defence Ministry on Wednesday announced the delivery of five units of S-400 Triumf Air Defence systems from Russian Federation is likely to be completed by April 2023. Under current law, the US may be forced to sanction Turkey now that the country has had "significant dealings with the Russian defense industry".
Turkey had also argued that the U.S. was slow to offer an alternative missile defence shield.
"It's not a fair situation", President Trump said on Tuesday, depicting the standoff as the product of the Obama administration's refusal to sell Turkey Patriot missiles.
Yet to be announced is whether the United States will impose economic sanctions on Turkey for its decision.
India signed an agreement with Russian Federation last October to procure a batch of the S-400 missile defence systems at an estimated cost of Rs 40,000 crore. "And it's a very tough situation that we've been placed in the United States", Trump told reporters during a Cabinet meeting at the White House.
By March 2020, Turkey's industrial participation in the F-35 program, which includes production on around 900 parts for the stealthy fighter, will be "unwound;" Lord said the projection is this will cost Turkey's economy around $9 billion over the life of the program.
Asked about the U.S. pressure to scrap the missile deal with Russian Federation, the government said it takes sovereign decisions based on security challenges facing the country.
But Washington baulked when Ankara, seeking to boost its own technology base, insisted on Turkey producing some of the system components itself as part of the deal.
In a significant break with a longtime North Atlantic Treaty Organisation ally, the administration of U.S. President Donald Trump said Turkey can no longer be part of the American F-35 fighter jet program.