European Council President Donald Tusk said on Twitter from a summit in Brussels that the European leaders made the decision “unanimously” on Thursday.
He said the decision was made “given zero progress in implementation of Minsk agreements”.
The EU-brokered Minsk peace agreement, backed by Moscow and Kiev, was first reached in late 2014 and then re-worked in early 2015 but is violated regularly.
The EU first imposed the measures in July 2014 after Malaysia Airlines flight MH17 was shot down over Ukraine, killing 298 people, an attack blamed by the EU on pro-Russian rebels.
The sanctions target whole sectors of the Russian economy including its valuable oil businesses.
Tusk received Ukraine’s President Petro Poroshenko in Brussels on Wednesday.
The Ukraine-Russia conflict flared up again last month when Russian forces seized three Ukrainian vessels and sailors as they tried to pass through the Kerch Strait from the Black Sea to the Sea of Azov.
The EU and NATO have condemned Russia over the incident, saying there was no justification for the violence, and demanded the sailors be freed.
Earlier on Thursday, NATO announced that it would give Ukraine secure communications equipment by the end of the year to help it combat Russia’s “destabilising behaviour”.
As well as the sector-wide economic sanctions, the EU also has measures in place targeting individuals and organisations over Russia’s annexation of Crimea in 2014 and in connection with the ongoing conflict in Ukraine.
The war in eastern Ukraine between government forces and rebels backed by Moscow has claimed more than 10,000 lives and rumbles on despite a series of periodic truce deals.
Earlier this week, the EU hit nine more people with sanctions over elections in the breakaway pro-Russian regions of Ukraine which were condemned as illegitimate by the international community.