It follows President Vladimir Putin's warning that Russia is a nuclear power and is ready to "repel any aggression towards Russia".

The federal government has reacted angrily to the threat and Prime Minister Tony Abbott has told question time that Australia's expanded sanctions would match those recently announced by the European Union.

Mr Abbott said up to 1000 "heavily armed Russian troops" are now operating openly in Eastern Ukraine and said Russia had been destabilising and "bullying" Ukraine for months.

The extra sanctions include:

•  restrictions on arms exports

• restrictions on Russian State-owned banks to Australia's capital markets

• stopping exports used for oil exploration and production

• restrictions on Australian trade and investment in Crimea and

• targeted travel bans and financial sanctions on 63 Russian and Ukrainian individuals and entities

Australia announced sanctions on Russia in March after Moscow annexed Crimea but the government was reluctant to raise the prospect of further sanctions while Australian unarmed police were in Ukraine, retrieving the remains of the victims of downed Malaysia Airline flight MH17.

But once the mission ended Australia immediately warned of further sanctions, including on the very limited uranium trade.

The current expansion of sanctions makes no mention of uranium but Mr Abbott said "the government does not rule our further sanctions in the future".

President Putin has also called for "substantive talks" on south east Ukraine's "statehood".

Foreign Minister Julie Bishop said President Putin was being provocative with is nuclear comment and "should be condemned for threatening anyone with the fact that Russia is nuclear power".

"We're already deeply concerned about the dangerous escalation of Russian activity inside Ukraine's borders and for him to refer to Russia as a nuclear power is provocative," she told ABC radio.

She will discuss the issue with allied counterparts at a NATO meeting this week.