The United States and western allies announced Monday that a meeting of the Group of Eight nations planned for June in Sochi, Russia, had been cancelled, with world leaders planning instead to meet in Brussels in retaliation for Russian President Vladimir Putin annexing Crimea.

“We will not participate in the planned Sochi Summit,” the members of the G-7 group and representatives of the European Union said in a statement from The Hague.

“We will suspend our participation in the G-8 until Russia changes course and the environment comes back to where the G-8 is able to have a meaningful discussion and will meet again in G-7 format at the same time as planned, in June 2014, in Brussels, to discuss the broad agenda we have together,” the statement added.

Obama met with leaders from the G-7 nations in the Netherlands Monday in an attempt to isolate Putin and deter him from moving his forces further into Ukraine. The leaders met on the side of a previously planned nuclear summit that has been overshadowed by the crisis in Crimea.

The Kremlin annexed the Ukrainian region last week, defying warnings from the U.S. and western European allies.

The cancellation of the high-profile gathering in Sochi is a blow for the Kremlin. But thus far, Putin has been unmoved by limited sanctions on senior Russian and pro-Moscow Ukrainian government officials.

Obama has vowed that Putin will face “costs” for his actions and is looking to rally European support behind broader sanctions in the event that Moscow gets more aggressive in Ukraine.

However, some European nations are reluctant to impose major penalties on Russia over fears that sanctions would harm their own economies.

Reports said that Russian military forces had massed near Ukraine’s border, but the Kremlin has said they have no plans for any further military incursions in the neighboring state.

The administration labeled the decision as a suspension for Russia, saying new sanctions could come against the Putin regime if it escalates its incursion into Ukraine.

In their statement, the G-7 nations — Canada, France, Germany, Italy, Japan, the United Kingdom and U.S., as well as the presidents of the European Council and European Commission — reaffirmed their support for “Ukraine’s sovereignty, territorial integrity and independence.”

The leaders said they “do not recognize” either the Crimean referendum to secede from Ukraine or Russia’s moves to annex the province.

“We reaffirm that Russia’s actions will have significant consequences,” the leaders vowed.

“We remain ready to intensify actions including coordinated sectoral sanctions that will have an increasingly significant impact on the Russian economy, if Russia continues to escalate this situation,” the statement added.

Russian Foreign Minister Sergey Lavrov downplayed the G-7 snub.

“If our Western partners believe the format has exhausted itself, we don't cling to this format,” he said according to a report from Reuters.

“We don't believe it will be a big problem if it doesn't convene,” Lavrov added about the Sochi summit.

This story was published at 3:53 p.m. and has been updated.