The Organisation for Economic Cooperation and Development said on Thursday that it had postponed the process for Russian membership and said it would boost links with Ukraine.
The OECD, a key policy forum for advanced democracies, said that at the request of its 34 members it had "postponed activities related to the accession process" for the Russian Federation "for the time being".
OECD members had also agreed that the OECD "should respond positively to Ukraine's request to further strengthen existing OECD-Ukraine co-operation," the grouping said in a short statement.
The decision comes amid mounting international pressure on Russia over its incursion into Ukraine's Crimea peninsula, which has sparked a Cold War-style stand-off between Moscow and the West.
On Sunday, Crimea plans to hold a controversial referendum on switching to Kremlin rule.
The OECD referred to signals from the new Western-backed government in Kiev, which is also in contact with the International Monetary Fund, that it wants to reform its crisis-stricken economy.
The OECD said that strengthening cooperation with Ukraine would enable the country "to take advantage of the OECD's expertise to address the public policy challenges it faces."
The statement said the OECD had informed the Russian Federation of the decision to postpone the accession process.
Russia has cooperated with the OECD since 1992 and in 1996 it made an official request to become a member of the organisation.
OECD members approved the opening of membership negotiations for Russia in 2007.
The OECD provides policy advice and in-depth analysis of every aspect of how an economy, institutions, social services, education and health programmes function with a view to improving living standards.