Ukraine's president has ordered the withdrawal of all state services, including funding for hospitals and schools, from rebel-held areas.
Petro Poroshenko issued a decree that also asks parliament to revoke a law granting self-rule to the Donetsk and Luhansk regions.
Pro-Russian separatists held elections there last month which Mr Poroshenko condemned as illegal.
More than 4,000 people have died in the conflict in eastern Ukraine.
Separatists have been fighting government forces since April in a war that has driven hundreds of thousands of people from their homes.
Mr Poroshenko's ruling says all state companies and institutions should end their work in the Donetsk and Luhansk regions within a week.
It also says Ukraine's central bank is to close down all banking services - including card operations - in some areas within a month.