The European Union has decided to "indefinitely immobilise" the Russian assets held in Europe, foreign policy chief Kaja Kallas announced.

"The EU just decided to indefinitely immobilise Russian assets. This ensures that up to €210 billion ($246 billion) in Russian funds stay on EU soil, unless Russia fully pays reparations to Ukraine for the damage it has caused," Kallas said on X on Friday.

European Commission President Ursula von der Leyen welcomed the decision, stressing that this sends a "strong signal" to Russia that its costs will continue to rise as long as the war continues.

"In the October #EUCO (European Council meeting), EU leaders committed to keep Russian assets immobilised until Russia ends its war of aggression against Ukraine and compensates for the damage caused. Today we delivered on that commitment," European Council President Antonio Costa said on X.

The decision comes as the bloc aims to free up $105 billion for Ukraine, either by borrowing funds directly or by using Russian assets frozen under sanctions at Euroclear.

Belgium, which hosts Euroclear — the main depository for frozen Russian assets in the EU — has expressed reservations about the plan, fearing the country could face legal challenges and bear financial liability alone.

The Belgian government has insisted on several changes to the EU Commission's initial proposal to counter potential financial and legal risks and better protect Euroclear.

Meanwhile, Russia's central bank said on Friday that the EU’s plans to use its frozen assets are illegal and threatened to challenge the proposal.