On Monday, David Miliband, Britain’s foreign secretary, also announced that Britain would suspend visa facilitation negotiations with Russia and that Lugovoi could be extradited to Britain if he travelled abroad.
Miliband said: "This is a situation the government has not sought.
"First, we will expel four diplomats from the Russian embassy in London; secondly, we shall review the extent of our co-operation with Russia on a range of issues."
Russia had confirmed to British prosecutors its refusal to hand over Lugovoi.
According to the office of Gordon Brown, the British prime minister, Russian authorities have proposed putting Lugovoi on trial in Russia; but British prosecutors believe that would not "meet standards of impartiality and fairness".
British prosecutors allege that Lugovoi used a rare radioactive isotope to poison Litvinenko, a former intelligence agent turned Kremlin critic, during a meeting in London in November.
On his death bed, Litvinienko made a statement blaming, Vladimir Putin, the Russian president, for his death.