The UK, US, Canada and Japan will ban imports of Russian gold in an effort to hit Moscow's ability to fund the war in Ukraine.
The UK PM said the move would "strike at the heart of Putin's war machine".
Gold exports were worth £12.6bn ($15.4bn) to Russia in 2021, and the UK says their importance has increased since the invasion as oligarchs rush to buy bullion to avoid sanctions.
It comes as the G7 group of the world's richest nations meet in Germany.
US President Biden suggested the other G7 nations - Germany, France and Italy - would also join the ban.
"Together, the G7 will announce that we will ban the import of Russian gold, a major export that rakes in tens of billions of dollars for Russia," he said in a tweet.
UK Prime Minister Boris Johnson added: "We need to starve the Putin regime of its funding. The UK and our allies are doing just that."
With London a major global trading hub for gold, the UK government said the move would have a huge impact on President Putin's ability to raise funds.
Since Russia invaded Ukraine in February, Western countries have introduced a range of sanctions targeting wealthy individuals, banks, businesses and state-owned enterprises.
The US, European Union, UK and other countries have sanctioned more than 1,000 Russian individuals and businesses so far.
The latest measure will mean UK import restrictions will apply to Russian exports worth around £13.5bn.
The UK said the gold import ban would come into force shortly, with legislation introduced in Parliament in the coming weeks.
It will apply to newly mined or refined gold, and does not impact gold previously exported from Russia.
There are no plans to extend restrictions to Russian gold purchased legitimately before the import ban was put in place.
Discussions at the G7 summit in Bavaria are expected to focus on the international response to the war in Ukraine, as well as soaring prices and the global food crisis.