Britain's foreign secretary accused Russian President Vladimir Putin of personally ordering the poisoning of the Skripals.
According to British experts, the toxin used in the attack was part of a group of nerve agents known as Novichok, which was developed in the former Soviet Union.
The British Council said it was profoundly disappointed by Russia's decision and remained committed to developing long-term people-to-people links with Russian Federation despite the closure.
The announcement came after British authorities said Russian Federation was "culpable" of the poisoning of Sergei Skripal and his daughter with a Soviet-designed nerve agent called Novichok on March 4.
The UK ambassador to Moscow, Laurie Bristow, was summoned to the ministry on Saturday morning and told of Moscow's action.
It also said it is ordering the closure in Russian Federation of the British Council, a government-backed organization for cultural and scientific co-operation, and is ending an agreement to reopen the British consulate in St. Petersburg.
Vladimir Dzhabarov, deputy chairman of the foreign affairs committee in the upper house of the Russian parliament, spoke Saturday after Russia ordered 23 British diplomats leave the country and that the British Council in Russia be closed.
British Defence Secretary, Gavin Williamson, sparked particular outrage in Moscow with his blunt comment on Thursday that "Russia should go away, it should shut up".
Skripal betrayed dozens of Russian agents to British intelligence before his arrest in Moscow in 2004.
United Kingdom Prime Minister Theresa May had said that the Kremlin, was "highly likely" to be behind the attack. They remain in critical condition and a policeman who visited their home is in serious condition.
He was sentenced to 13 years in prison in 2006 and four years later was given refuge in Britain after being exchanged for Russian spies. Moscow and London have both ordered diplomats expelled in the deepening dispute.
Leaving the meeting, he said: "This crisis has arisen as a result of an appalling attack in the United Kingdom, the attempted murder of two people using a chemical weapon developed in Russian Federation and not declared by Russian Federation to the Organisation for the Prohibition of Chemical Weapons (OPCW) as Russian Federation is obliged to do under the Chemical Weapons Act".
New tensions have also surfaced over the death Monday of a London-based Russian businessman, Nikolai Glushkov. "This latest action by Russian Federation fits into a pattern of behavior in which Russian Federation disregards the global rules-based order, undermines the sovereignty and security of countries worldwide, and attempts to subvert and discredit Western democratic institutions and processes".
And the ministry had also warned Britain that "if further unfriendly actions are taken towards Russia, the Russian side retains the right to take other answering measures".
Russia's Foreign Ministry has summoned the British ambassador to Russian Federation for talks in a heightening dispute over a nerve agent attack on a former spy in Britain.