The US is poised to impose sanctions on Turkey over its acquisition this year of Russian S-400 air defence systems.
The long-anticipated step, which is likely to infuriate Ankara and severely complicate relations with the administration of president-elect Joe Biden, could be announced any day, US officials said.
The sanctions would be imposed on Turkey's Presidency of Defence Industries and its head, Ismail Demir, sources said
They said the announcement was expected on Friday but could come on any day.
The Turkish lira weakened after the news. US sanctions could harm an economy struggling with a slowdown caused by the coronavirus pandemic, double-digit inflation and badly depleted foreign reserves.
A senior Turkish official said sanctions would backfire and hurt relations between the two Nato members.
"Turkey is in favour of solving these problems with diplomacy and negotiations," the official said. "We won't accept one-sided impositions."
The US State Department could widen or narrow the scope of planned sanctions against Turkey, which has been a Nato ally for decades.
But sources said the announcement of sanctions in their current form was imminent, suggesting the US was out of patience and finally ready to act.
Washington has warned Ankara in the past about sanctions requirements under its law.
Russia delivered the ground-to-air S-400s last year and Turkey tested them in the Black Sea area as recently as October.
Ankara said they would not be integrated into Nato systems and posed no threat, calling for a joint working group on the issue.
But the US says the S-400s do pose a threat and announced this year that it was removing Turkey from the F-35 fighter jet programme over the matter.
Lockheed Martin's F-35 stealth fighter jet is the most advanced aircraft in the US arsenal and is used by Nato members and other US allies.