The measures will prohibit transactions with The Hague-based court and cut off resources, with the aim of "crippling" the institution's operations, US Secretary of State Marco Rubio said in a statement.
"(US President Donald) Trump will never allow the International Criminal Court to prosecute Americans," the statement said, describing the ICC as a "rogue court".
Rubio noted that the US had never joined the court.
"We don't need it. And we don't want it," he said, adding that both Republicans and Democrats had for decades rejected the idea that the ICC could prosecute US citizens, military personnel or political leaders.
Trump's administration had previously imposed sanctions on 13 judges and prosecutors at the court.
The latest measures come amid tensions over the ICC's decision to issue an arrest warrant for Israeli Prime Minister Benjamin Netanyahu on suspicion of war crimes in the Gaza Strip.
The State Department said it had delayed imposing sanctions on the institution itself in the hope that the ICC or its member states would address US concerns but neither had taken meaningful steps to do so.
It said the United States remained open to a diplomatic solution but warned that further measures could follow.
"Either the ICC will end its threats, or we will end the ICC," the statement said, warning that the US would otherwise continue its campaign to dismantle the court "brick by brick".
The ICC strongly condemned the sanctions, describing them as an "unprecedented step" and an attack on the international legal order.
"It is an assault on the rule of law and on the very foundations of the international legal order which strikes at the simple principle that no one stands above the law," the court said in a statement.
The ICC accused the US of attempting to "obstruct the course of justice".
The European Commission also expressed concern over the US move and pledged to continue co-operating with the court to ensure it could operate effectively.
The commission said it hoped for dialogue with the US, noting that the sanctions would not take effect for another six months.
The announcement came just hours after South African jurist Navi Pillay, who served as a judge at the ICC from 2003 to 2008, was awarded the Nobel Peace Prize.
Pillay warned that the award came at a time when international law was under growing pressure.
"This worsening reality is particularly visible with the attacks on the International Criminal Court," she said shortly before the US sanctions were announced.
In September, Trump called on countries to withdraw from the ICC during an address to the United Nations General Assembly.
Germany, the Netherlands and other European Union countries subsequently pledged their full support for the court.
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