Under pressure, FIFA moves Russia home games and bans flag and anthem
The announcement came as two nations who have qualified for next year's World Cup, France and England, said they would not play Russia.
It also was quickly rejected as "totally unacceptable" by Poland, who are drawn to play Russia away in a single-match World Cup play-off semi-final.
FIFA said in a statement that it would continue its "dialogue with the IOC, UEFA and other sport organisations to determine any additional measures or sanctions, including a potential exclusion from competitions... should the situation not be improving rapidly".
The governing body of world football said Russian teams would play as the "Football Union of Russia" and no "flag or anthem of Russia will be used".
Cezary Kulesza, the president of the Polish football association quickly rejected FIFA's decision.
"Today's FIFA decision is totally unacceptable," he tweeted. "We are not interested in participating in this game of appearances. Our stance remains intact: Polish National team will NOT PLAY with Russia, no matter what the name of the team is."
Earlier Sunday, France, who won the last World Cup in Moscow, suggested FIFA throw out Russia.
"The world of sport, and especially football, cannot remain neutral. I certainly would not oppose the expulsion of Russia," said French Football Federation president, Noel Le Graet.
"In these dramatic circumstances, how can one envisage playing football against this country," he said.
The winner of the Russia-Poland playoff is due to face Sweden or the Czech Republic for a place in Qatar. Both have said they won't play Russia.
"FIFA has taken good note of the positions expressed via social media by the Polish Football Association, the Football Association of the Czech Republic and the Swedish Football Association