Hugo Chavez has recalled Venezuela's ambassador to Colombia and frozen ties with Bogota.
The Venezuelan president's move follows allegations made by Colombia that weapons confiscated from fighters belonging to the Revolutionary Armed Forces of Columbia (Farc) rebel group, came from Venezuela.
Chavez said the Colombian government was acting "irresponsibly" and denied any involvement in the weapons.
He also said that he would freeze all trade agreements with Bogota and find a replacement for Colombian imports.
'Aiding the Farc'
Colombian officials have long alleged that Chavez's government has aided Farc and last week, the government announced that anti-tank rocket launchers found in the rebel group's possession had been sold by Sweden to Venezuela during the 1980s.
Sweden has confirmed the weapons were originally sold to the Venezuelan military.
In recent days, Chavez has also expressed growing discontent over an increased US military presence in Colombia.
The US plans to shift its anti-drug operations from Ecuador to three Colombian airbases, a move Chavez says poses a threat to his country.