The new decree is paving the way for Crimea to be absorbed into Russia.
It said it had taken into account Sunday’s referendum in Crimea, in which officials said 97% of voters backed breaking away from Ukraine.
The EU and the US said the referendum was illegal and imposed sanctions on 21 officials from Russia and Ukraine.
Crimea was taken over by pro-Russian gunmen in late February.
The incursion came after Ukraine’s President Viktor Yanukovych fled to Russia following months of street protests.
The Kremlin officially denies the gunmen are Russian soldiers, but concedes that lawmakers authorized President Vladimir Putin to use force after a formal plea for help from Viktor Yanukovych.
Crimea has been part of Ukraine since 1954, but much of its population is ethnic Russian.
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