Foreign Minister Nanaia Mahuta is concerned Russia's recognition of two breakaway parts of Ukraine could be an attempt by Russia to "create a pretext for invasion".
Russian President Vladimir Putin in the past 24 hours signed a decree recognising the two regions' independence, then ordered forces into those regions for "peacekeeping".
It is suspected this could be used to justify an attack.
Russia's actions have revived a domestic political dispute between Labour and National over the fact that New Zealand's inability to apply proper sanctions to Russia thanks to a legislative lacuna which means New Zealand can only sanction countries through the United Nations process, where Russia wields a veto.
National's foreign affairs spokesman Gerry Brownlee wants New Zealand to pass legislation giving the Government the power to sanction outside of the United Nations process, saying today's events in Ukraine highlight the "joke" of the current sanctions regime.
Mahuta said New Zealand has consistently voiced its support for the sovereignty and territorial integrity of Ukraine.
There was no basis under international law for the recognition of the self-proclaimed "Donetsk People's Republic" and "Luhansk People's Republic", she said.
"We are concerned that this is a calculated act by President Putin to create a pretext for invasion, which would be a clear act of aggression.
"Recognition by Russia further undermines Ukraine's sovereignty and territorial integrity, erodes efforts towards a resolution of the conflict and is a violation of international law," she said.
Prime Minister Jacinda Ardern described the Government's statement as "strong".
She noted Russia's actions had been criticised by like-minded groups such as the European Union.
"New Zealand shares in that strong stance," Ardern said.
"Everyone wants to see de-escalation. Everyone wants to see diplomacy work," she said, echoing Mahuta's statement, which called for diplomacy and a peaceful resolution.
Putin's recognition of the two regions was roundly criticised overseas. White House press secretary Jen Psaki said President Biden would ban US investment and trade in the breakaway regions.
British Foreign Minister Liz Truss tweeted that the UK would announce "sanctions on Russia in response to their breach of international law and attack on Ukraine's sovereignty and territorial integrity".
New Zealand lacks the ability to sanction Russia outside of the United Nations process.
Russia is currently chair of the United Nations Security Council and is chairing a meeting on the crisis in Ukraine, despite other countries on the council, like the United States and the United Kingdom calling out Russia as the aggressor.
Brownlee said the fact Russia was chairing the meeting was "a total joke".
"If Russia is chairing the meeting on the tensions between Russia and the Ukraine that is a total joke, it's laughable. You wouldn't even get that in a cartoon.
"It demonstrates how hopelessly flawed New Zealand's position is in constantly relying on the United Nations to guide our foreign policy," Brownlee said.
Labour dismissed Brownlee's member's bill last year to pass legislation giving New Zealand the ability to sanction countries independently of the United Nations process.
Ardern said today the Government was looking at action like travel bans.
Ardern said that the autonomous sanctions bill "doesn't necessarily offer the breadth of situations where sanctions often may be considered".
She said there were "a few questions for us on whether the regime or the bill as it stood was fit for purpose".
Brownlee shot back at Ardern's criticism of the autonomous sanctions bill.
"We should be alongside like-minded countries, participating in sanctions activities against an aggressor country like Russia," Brownlee said.
"The suggestion that we are not sure if a particular bill stacks up that's the sort of finger twiddling nonsense that leaves New Zealand hanging out there as a state that's willing to accept anything in the world," he said.
He said a sanctions bill could be introduced to the House when Parliament returns from recess next week, and progressed through all stages.
He dismissed some of Ardern's criticisms of the bill, noting that it originally came out of the Ministry of Foreign Affairs in the last days of the fifth National government.
"It would stretch credibility in my mind to suggest that MFAT had not considered what would be necessary in a sanctions bill," he said.
"Mfat would have a strong view on it, and I don't think it would take a long time to get a bill that would be so-called 'fit for purpose'".
Brownlee was strongly critical of Russia.
"This sort of aggression to a country that has embraced democracy and is becoming a stronger democracy is completely unacceptable," he said.
He criticised the idea of a travel ban on Russians, noting that New Zealand has barred travel from nearly all Russians as part of the current MIQ policy, which bars almost anyone from entering the country.
