Crimea's parliament has formally declared independence from Ukraine and asked to join the Russian Federation.
It follows Sunday's controversial referendum which officials say overwhelmingly backed leaving Ukraine.
The government in Kiev has said it will not recognise the results. The US and EU say the vote was illegal and have vowed to impose sanctions on Moscow.
The Crimean peninsula has been under the control of pro-Russia forces since late February.
Moscow says the troops are pro-Russian self-defense forces and not under its direct control.
The crisis follows the ousting of Ukraine's pro-Moscow president Viktor Yanukovych on February 22, following months of street protests and deadly clashes.
Ukraine's interim Prime Minister Arseniy Yatsenyuk has called the vote "a circus performance" which had been backed up by "21,000 Russian troops, who with their guns are trying to prove the legality of the referendum".
The vote was boycotted by many among Crimea's minority Ukrainian and Tatar population, and the election process has been widely criticised.
Meanwhile, the Ukrainian parliament in Kiev has formally approved the partial mobilisation of 40,000 reservists, in response to what it called the "war-time situation".
Interim President Oleksandr Turchynov described the referendum as a "great farce" which "will never be recognised either by Ukraine or by the civilised world".
According to the vote in Crimea's parliament on Monday, Ukrainian laws now no longer apply in the region and all state Ukrainian state property belongs to an independent Crimea.
The region will adopt the Russian currency, the rouble, and will move to Moscow time - two hours ahead - by the end of March.
The document approved by MPs also appealed to "all countries of the world to recognise it as an independent state".
The Crimean peninsula, which borders Ukraine and Russia, has been under the control of pro-Russian armed forces since late February.
Russia officially insists the troops under not under its command but as pro-Russia self defence forces. Kiev says Crimea - which has a majority ethnic Russian population - is under military occupation.
The referendum on breaking from Ukraine and joining Russia was called in early March by the Crimean parliament in early March, with voters asked to choose between joining Russia, or having greater autonomy within Ukraine.
There was no option for those who wanted the constitutional arrangements to remain unchanged.
Ukraine's chief electoral official, Mikhail Malyshev, said the vote was nearly 97 percent in favour of joining the Russian Federation, with a turnout of 83 percent.
But Crimea's Tatar population - about 12 percent of the population - said they would boycott the vote, fearing their lives would be worse under the Kremlin.
The Tatars were deported to Central Asia by Soviet dictator Joseph Stalin in 1944. They were only able to return with the fall of the Soviet Union and many want to remain in Ukraine.
Many ethnic Ukrainians - who make up 24 percent of the population - also said they would not vote.
EU foreign ministers meeting in Brussels are discussing the bloc's response, including imposing a visa ban and an asset freeze against a number of Russian officials.
The bloc has already suspended talks on an economic pact with Russia and an easing of visa restrictions.
Speaking in Brussels, EU foreign policy chief Catherine Ashton said the "so-called referendum" was "illegal under the constitution of Ukraine and under international law".
"I call upon Russia yet again to meet with Ukrainian leaders and to start a dialogue with them, and to try to move to de-escalation, please, as quickly as possible. We've seen no evidence of that," she told reporters.
She said the EU "can't simply sit back and say this situation can be allowed to happen", but that ministers needed to think carefully about what their response should be.
The White House has described Russia's actions in Crimea as "dangerous and destabilizing", and said the international community would not recognise the results of a poll "administered under threats of violence".
US President Barack Obama has warned Moscow that Washington is also ready to impose "costs" over its actions in Ukraine.