The European Union is working on imposing new sanctions on Russian gold after a discussions among the G7 nations last month.
Russia is the world's second-largest gold mining country and its exports of the precious metal were estimated to be worth £12.6 billion ($15.03bn) in 2021.
Britain believes the measure will have a “huge impact” on Russian President Vladimir Putin’s ability to fund his armed forces and oligarchs’ attempts to avoid the effects of financial sanctions on buying bullion.
Preparations for the new package were on Wednesday continuing and it was understood some nations will be pushing to add more measures before they are presented to member states for approval.
The G7 — EU members France, Germany and Italy as well as the US, Canada, Japan and the UK — last month announced that such a package was imminent.
“The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine,” US President Joe Biden tweeted.
He said gold was "a major export that rakes in tens of billions of dollars for Russia”.
A UK government statement said: "UK, US, Japan and Canada will lead the G7 to ban import of Russian gold, the country’s biggest non-energy export."
Industry analysts believe the ban could be largely symbolic because penalties imposed on Russia after its invasion of Ukraine have effectively already closed off European and US markets.
Flows to trading centres in London and Zurich have also been affected due to sanctioning from within the precious metal trade.
European Council President Charles Michel said imposing sanctions was only viable if they penalised Russia and not other countries involved in the gold market.
"On gold, we are ready to go more into the details and to look if it's possible to target gold in a manner that would target the Russian economy and not in a manner that would target ourselves," he said.
The goal of the measures is to dry up funding for Russia's war on Ukraine by squeezing its sources of revenue, as with existing sanctions on the country's energy exports.
There has been a de facto ban on Russian gold by the London market, as most buyers there stopped importing when the London Bullion Market Association struck the country from its accredited list.
The EU has imposed six packages of sanctions against Russia since it invaded Ukraine in February.