In that intrusion, Russian hackers are believed to have infected widely used software with malicious code, enabling them to access the networks of at least nine agencies in what US officials believe was an intelligence-gathering operation aimed at mining government secrets.
Britain has accused Russia's foreign intelligence agency of responsibility for a major cyber attack affecting thousands of organisations in the West. The measures target 32 individuals and groups, accusing them of attempting to interfere in last year's presidential election.
The U.S. and United Kingdom on Thursday formally attributed the supply chain attack of IT infrastructure management company SolarWinds with "high confidence" to government operatives working for Russia's Foreign Intelligence Service (SVR).
The actions, foreshadowed for weeks by the administration, represent the first retaliatory measures announced against the Kremlin for the hack, familiarly known as the SolarWinds breach.
President Biden on Wednesday announcing his plan to withdraw American troops from Afghanistan. Until now, President Joe Biden has focused on the coronavirus pandemic and economy in his first months in office.
According to the executive order, the United States is expelling ten personnel from the Russian diplomatic mission in Washington, DC.
"The United States is not looking to kick off a cycle of escalation and conflict with Russia", Biden said.
Other measures are expected as well, though the administration is not likely to announce them.
Russian Federation and Americans are both proud and patriotic people.
The sanctions announced Thursday are the latest in a series of actions that successive presidential administrations have taken to counter Russian behavior seen as antagonistic. Both Barack Obama and Mr Trump expelled Russian diplomats.
North Atlantic Treaty Organisation members cited a "sustained pattern" of Russian hostility.
The Biden administration is set to place a wide range of sanctions against Russian Federation according to reports.
Vladimir Putin has been accused of sponsoring cyber attacks against the West Credit GETTY IMAGES
Reports of alleged "bounties" surfaced previous year, with the Trump administration coming under fire for not raising the issue directly with Russian Federation.
The Treasury Department sanctioned 32 organizations and individuals for their alleged influence operations aimed at the USA election. The individuals who were targeted include Konstantin Kilimnik, a Russian and Ukrainian political consultant who worked with former Trump campaign chairman Paul Manafort and who was indicted in special counsel Robert Mueller's Russia investigation.
The first USA official said the Russian rouble-denominated sovereign debt market was valued at about $185 billion, about a quarter of which is held by foreign investors.
"To bolster its malicious cyber operations, the FSB cultivates and co-opts criminal hackers, including the previously designated Evil Corp, enabling them to engage in disruptive ransomware attacks and phishing campaigns", the Treasury Department said.
In addition, Treasury issued a directive that prohibits USA financial institutions from participation in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021 by the Central Bank of the Russian Federation and provided authority for the US government to expand sovereign debt sanctions on Russia as appropriate.
Russian Federation summoned the U.S. Ambassador for what Foreign Ministry spokeswoman Maria Zakharova said would be a "difficult conversation" after the announcement.
President Biden informed Putin that the sanctions were coming earlier this week. The measures are to be announced Thursday according to the official who was not authorized to discuss the matter by name and spoke on condition of anonymity.
In a television interview last month, Biden replied "I do" when asked if he thought Putin was a "killer".
Biden appears to be trying to strike a balance between defending USA national interests against Russian Federation while making clear he would prefer to have a less volatile relationship and to cooperate on issues such as curbing Iran's nuclear program. Putin later recalled his ambassador to the USA and pointed to US history, including slavery and the atomic bombing of Japan in the Second World War.
Past sanctions by the U.S. have failed to bring an end to Russian cyber hacking.
'Russia-U.S. ties worst in 41 years': How much worse could it get? And though Trump was often reluctant to criticize Putin his administration also expelled diplomats in 2018 for Russian Federation alleged poisoning of an ex-intelligence officer in Britain.
US officials are still grappling with the aftereffects of the SolarWinds intrusion, which affected agencies including the Treasury, Justice, Energy and Homeland Security departments, and are still assessing what information may have been stolen.
For its part, the United Kingdom government's National Cyber Security Centre said Thursday that it was "highly likely" that the SVR was behind the SolarWinds breaches.