The US government imposed sanctions on Turkey over the acquisition and testing of the S-400 Russian defence missile system, further straining relations between the two Nato members.
The State Department announced the sanctions under the Countering America's Adversaries through Sanctions Act, passed by Congress in 2017.
It is designed to penalise any significant transactions with Russia. The estimated cost of the S-400 missile system is $2.5 billion.
Despite pressure from Congress, the Trump administration delayed sanctions on Ankara, even after the country installed the Russian system in July 2019 and began testing it in October.
"Today’s action sends a clear signal that the US will fully implement Caatsa Section 231 and will not tolerate significant transactions with Russia’s defence and intelligence sectors," Secretary of State Mike Pompeo said.
Mr Pompeo said Turkey "knowingly [engaged] in a significant transaction with Rosoboronexport, Russia’s main arms export entity, by procuring the S-400 surface-to-air missile system".
The sanctions include a ban on all US export licences and authorisations to Turkey's Presidency of Defence Industries, Ankara's military procurement agency, and an asset freeze and visa restrictions on Ismail Demir, its president, and other officers.
Christopher Ford, assistant secretary of state for international security, said the sanctions barred the Presidency of Defence Industries from obtaining US export licences.
Mr Ford said they prohibited it from receiving US loans of more than $10 million, banned assistance from the Export-Import Bank of the US and required Washington to use its influence with international financial institutions to block loans to the agency.
“I would in no way underestimate the importance of cutting off the main military procurement entity of a military ally from items coming from the US defence industrial base,” he said.
Congress passed the final version of the US annual defence bill on Friday, which included a provision requiring the president to sanction Turkey over the S-400 sale.
Although President Donald Trump has threatened to veto the bill after Congress’ refusal to include unrelated language repealing liability protection for social media companies, the Senate and the House passed it with veto-proof majorities.
The defence bill stipulates that the president can remove the sanctions if Turkey relinquishes the Russian missile system.
But Turkish President Recep Tayyip Erdogan refuses to be moved on the S-400 issue, saying on Friday that US sanctions would be “disrespectful”.
Turkey on Monday condemned the imposition of long-anticipated US sanctions.
In a statement, the Foreign Ministry said Turkey would take “the necessary steps” in response, adding that the sanctions would “inevitably negatively affect” relations with the US.
Last year, Mr Erdogan raised the possibility of closing Incirlik air base in southern Turkey in response to possible sanctions.
Incirlik has hosted US aircraft since the 1950s and is used to fly missions into Syria and Iraq. It also houses nuclear warheads.
The US also has a radar base at Kurecik in Malatya, eastern Turkey, and another air base in the western province of Izmir.
The ministry said Turkey had proposed setting up a Nato working group to address its use of the Russian-built defence system in an “objective and realistic ground, free from political prejudices”.
The EU also imposed narrow sanctions on Turkey over its energy exploration in the Eastern Mediterranean amid growing tension with Greece and Cyprus caused by Ankara's drilling and military presence off the coast of the disputed island.