Gazprom says Russia's natural-gas price for Ukraine will rise by $100 to $485 per 1,000 cubic meters as of April.
The announcement was made at a meeting between Russian Prime Minister Dmitry Medvedev and Gazprom chief Aleksei Miller on April 3.
Medvedev told Miller that Ukraine was freed from paying duty on its gas imports from Russia under the terms of the 2010 Kharkiv Agreement that also provided for Russia's Black Sea Fleet to remain in Crimea.
"Considering the decreasing international legal grounds for the existence of the agreement and the denunciation of the agreement itself," Medvedev said, he was rescinding the agreement, effective April 1.
Miller said the deal was being canceled because Ukraine was unable to pay its debt from 2013 and make "full payments for current deliveries."
The announcement came after Miller met with officials from Ukraine's state gas company, Naftogaz, earlier on April 3. Miller had insisted Ukraine immediately pay its debt for gas, which Miller said now amounted to some $2.2 billion.
Miller later said Gazprom hoped Ukraine would pay that bill but he added, "we see the situation [in Ukraine] is not getting better, it is only getting worse."
Gazprom announced on April 1 that it was raising the price of gas for Ukraine from $268.5 per 1,000 cubic meters to $385.5 because of Ukraine's debt of some $1.7 billion for Russian gas supplies.
Miller said in his meeting with Naftogaz representatives that Ukraine received some $500 million of gas in March, bringing the debt up to $2.2 billion.
European customers are paying just under $400 per 1,000 cubic meters of gas.
Miller has also told Naftogaz officials Ukraine needed to fill its underground gas-storage facilities to ensure the smooth transit of Russian gas to customers in Europe.
With reporting by Reuters and Interfax