File Photo: Israeli soldiers stand by as Israeli settlers throw stones at Palestinians during clashes in the town of Huwara in the West Bank. AFP
Foreign Secretary David Lammy said that Israeli government "inaction... has allowed an environment of impunity to flourish where settler violence has been allowed to increase unchecked".
The sanctions are the third imposed by London targeting those involved in settler violence since February.
The organisations listed are a religious school Od Yosef Chai Yeshiva, the Hashomer Yosh NGO, the charity Torat Lechima and Amana, a construction company.
The settlements are the Tirzah Valley Farm Outpost, Meitarim Outpost, and Shuvi Eretz Outpost.
The United States recently announced similar sanctions, including against Hashomer Yosh, which the foreign ministry in London said "provides volunteers for illegal outposts".
Volunteers from the group this year fenced off a village to prevent the return of 250 Palestinian residents who had been forced to leave, according to the US State Department.
"Today's measures will help bring accountability to those who have supported and perpetrated such heinous abuses of human rights," said Lammy, calling for Israel to "crack down on settler violence and stop settler expansion on Palestinian land".
Violence has soared in the West Bank since Hamas launched Al-Aqsa Flood Operation on Israel in October last year.
On Monday, the Palestinian health ministry said Israeli forces killed two Palestinians, including a teenager, in the West Bank city of Jenin that has seen repeated military raids.
Over 700 Palestinians in the West Bank have been killed by Israeli troops and settlers in the last year, according to the Palestinian health ministry.
The UK announcement came after former foreign secretary David Cameron said the previous Conservative government had planned to sanction two "extremist" Israeli ministers.
Cameron told the BBC that he had been "working up" sanctions against Israeli finance minister Bezalel Smotrich and national security minister Itamar Ben-Gvir before the UK's general election in July.
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