The move followed a meeting of East African ministers in the Kenyan capital, Nairobi.
Raphael Tuju, Kenya's foreign minister who led the meeting, said that the sanctions apply immediately and would also target the warlords' associates and arms suppliers.
"We will not allow them to use our banks, we will not allow them to use our airports, we will not allow them to bring their children to school here... when they create hell in their own country," he said earlier on Tuesday.
The ministers said they would offer amnesty to those who agree to surrender for talks with Somalia's interim government.
They also agreed to draw up a list of those suspected in involvement of violence for prosecution for crimes against humanity.
Kenya has already banned the warlords from its territory and deported one several days ago.
Last week, Somalia's Islamic courts group militia seized large parts of Mogadishu from an alliance of US-backed warlords. At least 330 people died in the fighting.
"We are not intending to attack Jowhar or Baidoa. We want peace"
Sheikh Sharif Ahmed, Islamic courts chairman
Fears have grown of new violence after reports that Islamic militias were being deployed several miles north of Mogadishu, possibly to attack the last warlord hideout in Jowhar.
The country's weak interim government, wracked by infighting, has not been able to enter the capital because of the violence, instead operating 250km away, in the city of Baidoa.
Western intelligence groups have accused the Islamic courts group of having links with extremist groups, including al-Qaeda, but the clerics have denied the claims.
However, Sheikh Sharif Sheikh Ahmed, the Mogadishu Islamic Courts' chairman, said there would be no assault north of the capital.
"We are not intending to attack Jowhar or Baidoa. We want peace," he said on Tuesday.
Ali Abdullah Saleh, Yemen's president, has also offered to mediate in talks between the two sides, the country's official news agency reported on Tuesday. The move was welcomed by Somalia's transitional government.
"We welcome the offer by President Abdullah for his efforts to help solve Somalia's problem," said Abdirahman Mohamed Nur Dinari, the Somali government spokesman.
The meeting also urged Uganda and Sudan to provide peacekeepers for the troubled country.
That could require the lifting of a United Nations Security Council arms embargo, which has been in place since 1992.
Louis Michel, the European Union Development Commissioner who attended the Nairobi meeting, said it could be possible to create a "targeted exemption" of the embargo.
Somalia's parliament speaker told Aljazeera on Tuesday that the country needed international forces but not ones from neighbouring countries.
Sharif Hussin Shaikh Adam also warned that there should be a clear idea about the number of forces and how long they would stay.