The Mistral-class helicopter carriers - Vladivostok was supposed to be the first of two ships delivered to be to Russia according to the original deal signed in 2011. The ship was scheduled to be delivered to Russia by the last quarter of 2014.
The decision to suspend delivery of a Mistral naval assault ship to Russia risks costing France at least 1bn euros (£800m) and hundreds of jobs, officials say.
French President François Hollande delayed indefinitely on Tuesday his decision on whether to deliver the first of two Mistral helicopter carriers ordered by Russia citing the "current situation" in eastern Ukraine.
"The President of the Republic considers that the situation in eastern Ukraine still does not permit the delivery of the first BPC (helicopter carrying and command vessel)," said a statement from the president's office."He has therefore decided that it is appropriate to suspend, until further notice, examination of the request for the necessary authorisation to export the first BCP to the Russian Federation."
The statement follows months of speculation about the contract, with Paris coming under intense pressure from its NATO allies to scrap the EUR1.2 billion ($1.58 billion) contract.
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