France is suspending the delivery of a hulking warship to Russia amid security concerns about Moscow's actions in neighbouring Ukraine, President Francois Hollande's office said.
The announcement comes a day before the start of a Nato summit and after months of pressure on France from allies to suspend the sale amid tensions between Russia and Ukraine.
Mr Hollande's office, in a statement after he met with top defence advisers, called the fighting in eastern Ukraine "grave", and said Russia's recent actions harm "the foundations of security in Europe".
The Vladivostok, the first of two Mistral-class helicopter carriers ordered by Russia, was to be delivered next month. The second - named Sevastopol, after a port in Russian-annexed Crimea - has been slated for delivery next year.
Despite talk today of a possible ceasefire in Ukraine, Mr Hollande said that is not enough to allow France to authorise the delivery of the Vladivostok. His office made no mention of the second warship.
As recently as July, Mr Hollande said the deal was too costly to cancel, and even this week, his advisers had indicated that France was ready to go ahead with the first delivery.
In July, the president said that the Russians had paid for the ship, and France would have to reimburse 1.1 billion euro (£880 million) if it cancelled the delivery.
Unyielding to months of pressure from allies - including from some US senators - French officials had argued that France needed to respect an agreed contract, and said recent sanctions against Russia did not apply retroactively to the contract agreed three years ago.
French officials have also argued that the ship would be delivered without any weapons.