The G8 group of leading industrialized nations became the G7 on Monday, as leaders decided to end Russia's role in the group, CNN reports.
The move to suspend Russia's membership in the G8 is the latest direct response from major countries allied against Russia's annexation of Crimea, the White House said in a statement quoted by the network.
"International law prohibits the acquisition of part or all of another state's territory through coercion or force," the White House said. "To do so violates the principles upon which the international system is built. We condemn the illegal referendum held in Crimea in violation of Ukraine's constitution.”
"We also strongly condemn Russia's illegal attempt to annex Crimea in contravention of international law and specific international obligations," added the White House.
Russia was apparently not concerned by the move, as Russian Foreign Minister Sergey Lavrov said earlier in the day that being kicked out of G8 would be no big deal.
"G8 is an informal organization that does not give out any membership cards and, by its definition, cannot remove anyone," he said during a news conference.
"All the economic and financial questions are decided in G20, and G8 has the purpose of existence as the forum of dialogue between the leading Western countries and Russia," added Lavrov.
He added that Russia was "not attached to this format and we don't see a great misfortune if it will not gather. Maybe, for a year or two, it will be an experiment for us to see how we live without it."
An aide to British Prime Minister David Cameron confirmed to CNN that a group summit initially planned for June in Sochi, Russia, where the Winter Olympics were just held, is now off.
The United States and its allies in Europe are "united in imposing a cost on Russia for its actions so far," Obama said earlier in the Netherlands where he attended a nuclear security summit with other world leaders.
Western powers have imposed sanctions and other penalties against specific people in Russia close to President Vladimir Putin.
A senior Obama administration official told CNN that Obama and other leaders agreed that further steps to punish Russian President Vladimir Putin could include sanctions on energy, banking and defense sectors, all areas where Europe is deeply engaged economically with Russia.
Those additional sanctions could be prompted if Russia further escalates its incursion into Ukraine, which the official defined as sending troops beyond Crimea into the southern or eastern parts of the country. Violence in the contested peninsula could also trigger further sanctions.
Obama has come under fire from Republicans over his foreign policy which, they say, encouraged Putin to annex Crimea.
On Sunday, former presidential candidate Mitt Romney joined in the criticism, saying Obama could have taken more drastic steps to prevent the Russian invasion of Crimea.
Romney declared that Obama has been exhibiting "faulty judgment" and "naiveté" in dealing with the crisis in Ukraine, and noted that the President had slammed him during the 2012 presidential race for calling Russia the "number one geopolitical foe" of the U.S.