West Africa's regional bloc is closing all land borders with Mali and freezing the nation's bank account in an effort to force out mutinous soldiers who seized control in a coup last week.
The financial sanctions are among the harshest imposed in recent years on a nation in West Africa and are likely to strangle impoverished Mali, which imports nearly all of its fuel from neighbouring Ivory Coast.
Kadre Desire Ouedraogo, the president of the commission of the Economic Community of West African States, or ECOWAS, told reporters in Ivory Coast late on Thursday that the sanctions would go into effect in three days.
He said that in addition to the closure of the borders, all countries belonging to the 15-nation bloc would stop allowing Mali to use their ports.
In addition to the central bank freezing the country's account, Ouedraogo said the bloc would instruct the central bank not to transfer money to any of the Malian government's commercial bank accounts.
Already there have been long lines outside of the main banks in the Malian capital of Bamako, as panicked residents tried to take out their cash.
The military junta ousted the country's democratically elected leader in a coup last week. Already the United States, France and the European Union have cut off aid. The financial sanctions are bound to be a severe blow to the junta's ability to function.
Earlier on Thursday, five African presidents seeking to restore Mali's elected government were forced to make a mid-air U-turn and head to Ivory Coast to hold their meeting, after demonstrators supporting the military junta took over the tarmac to stop the jets from landing, officials said.
The presidents of Ivory Coast, Benin, Liberia, Niger and Burkina Faso were due to arrive in Mali on Thursday. The planes carrying the presidents were turned around after it became clear that the demonstrators had taken over the tarmac. They landed in Ivory Coast, where they went ahead with their meeting, officials said.
Last week's coup happened in one of the few established democracies in the troubled western half of the African continent.
Capt Amadou Haya Sanogo, who is in his 30s, seized power from President Amadou Toumani Toure, who is considered one of Africa's senior statesmen and was just months from stepping down.
Sanogo's soldiers have ransacked the presidential palace. They have set up their de facto seat of power inside an aging, two-storey building in the Kati military barracks located around 10km from the palace.
It was at that garrison that a mutiny erupted on March 21, led by troops angry over the treatment of fellow soldiers killed in operations in the country's north, where they were sent to fight Tuareg rebels. The soldiers accused Toure of mishandling the operations, and of sending the military to the remote region without enough arms or ammunition.
Several thousand people took to the streets this week in support of the military takeover, indicating that frustration at Toure's handling of the rebellion is more widespread.
Toure has gone into hiding and his whereabouts are unknown. He gave an interview on Thursday to French radio RFI saying that he was in good health and was carefully following the developments.
Meanwhile on Thursday, a joint force of Tuareg rebels began attacking the besieged northern city of Kidal using shells, rockets and gunfire, said a Niger government source speaking to both sides in the conflict.
The Tuareg leaders' decision to attack came after more than a week of negotiations failed, said the source, who spoke on condition of anonymity because he was not permitted to speak to the press.
Kidal would be a major prize for the rebels, who relaunched their decades-old fight in mid-January, led by battle-hardened officers and troops who fought for Libyan dictator Muammar Gaddafi and returned home heavily armed. Kidal is one of two major northern towns that failed to fall in two previous Tuareg rebellions in the 1990s and 2000s.
