The extended list of targeted entities includes Russian energy companies like Rostneft, Transneft and Gazpromneft.
In all, EU added 24 new people and 14 firms to the blacklist.
Financial sanctions will also apply to Russia's major arms manufacturers: Uralvagonzavod, Oboronproma and the United Aviation Corporation.
The punitive measures, announced in the official EU gazette on Friday, also includes travel restrictions and asset freezes on individuals within the Russian administration - including deputy speaker of the State Duma Igor Lebedev and notorious nationalist politician Vladimir Zhirinovksi - and a number of pro-Russian separatist leaders in eastern Ukraine.
According to the announcement by the EU Council, the list includes individuals who have acted against Ukraine's territorial integrity. In total, EU sanctions now apply to 119 people.
The new package was agreed upon last Friday, but the EU has twice delayed its implementation in view of reports about a ceasefire in eastern Ukraine.
The diplomats had said that the sanctions might be cancelled altogether if situation on ground showed significant improvement.
Russia promises to strike back
Moscow has announced it is preparing retaliatory measures.
Spokesman of the Russian Ministry of Foreign Affairs has said the new punitive measures were an "unfriendly move".
Andrey Belousov, adviser to President Vladimir Putin, has told the RIA Novosti news agency that Russia might impose restrictions on used cars and non-food imports from the EU.
Russian arms exporter: EU sanctions will cause no problems
Deputy head of Russia's state-owned arms exporting firm Rosoboronexport said on Friday that the new sanction package from the EU would not have major effects on the company's operations.
"We do not expect our sales to suffer a big blow. Our international clients use the types of armament and equipment that are all Russian-made. The sanctions will have no effect on us," said Rosoboronexport deputy CEO Sergey Goreslavski, as quoted by RIA Novosti.
The new sanctions package, which came into effect on Friday, envisages restrictions on loans for five major state-run banks and on business deals between EU firms and Russian oil and defence companies.
EU solidarity with Ukraine
Ukraine's President Petro Poroshenko has said that the new sanctions demonstrates the EU's solidarity with Ukraine.
"Never before have I felt such solidarity," Poroshenko said during a media conference in Kiev on Friday. "I feel like we are a true member of the European family."
President Poroshenko has added that he hopes his country's parliament and the EU will manage to ratify the Association Agreement, which provides for closer economic and political cooperation between Ukraine and the EU, on 16 September.
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