Speaking after talks with Moscow's ambassador to NATO, Rasmussen announced the review of "an entire range" of military cooperation and the suspension of a ground-breaking joint mission involving the destruction of Syrian chemical weapons.
At the same time NATO will "intensify our partnership with Ukraine", strengthening support of democratic reforms and helping boost Ukraine's army, including with more joint training and exercises.
Rasmussen said the situation in Ukraine "presents serious implications for the security and stability" of the region and that Russia "continues to violate" Ukraine's sovereignty and territorial integrity.
NATO also decided to suspend staff-level civilian and military meetings with Russia "for now".
"We have put the entire range of NATO-Russia cooperation under review. NATO foreign ministers will take decisions on this in early April.
"Russia's actions have consequences."
But NATO is keeping the door open for political dialogue and is therefore ready to maintain meetings of ambassadors in the NATO-Russia Council, such as one that took place today, Rasmussen noted.
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