The Vladivostok, the first of two Mistral-class helicopter carriers ordered by Russia, was due to be delivered next month as part of a 1.2 billion euro ($1.6 billion) contract — the biggest-ever sale of NATO weaponry to Moscow.
The second ship, named Sevastopol, ironically, after a port in the Russia-annexed Crimean Peninsula, has been slated for delivery next year.
In an announcement on the eve of a NATO summit in Wales, French President Francois Hollande's office called the fighting in eastern Ukraine "grave," and said Russia's recent actions harm "the foundations of security in Europe."
It also came after months of pressure on France from allies to suspend the sale because of tensions between Russia and Ukraine.
A French diplomatic official said a delivery wouldn't go through before November. The official spoke on condition of anonymity because he wasn't authorized to speak publicly on the matter.
Hollande said talk of a possible cease-fire in Ukraine wasn't enough to allow France to authorize the delivery of the Vladivostok. His office made no mention of the second warship.
France stopped short of cancelling the deal, suggesting that a change in Russia's behaviour and handling of the Ukraine crisis could pave the way for the delivery at a later date.
The Vladivostok can carry 700 troops, 16 helicopter gunships, and up to 50 armoured vehicles.
Analysts have said the warships would give Russia enhanced ability to move large numbers of troops and equipment, but were not game-changers for Moscow's already powerful military.
Months of resistance to suspending the deal testified in part to Paris' unwillingness to give up a contract worth more than 1 billion euros and thousands of jobs at a time of France's economic slump.
France has no guarantees about how the ships might be used, though the French defence export-control agency had already given the go-ahead for the delivery.
Ukrainian officials had insisted the delivery would violate the European Union's code of conduct. On Friday, the EU is set to toughen sanctions against Russia, after a recent worsening of the crisis in Ukraine.
A senior U.S. defence official said Washington welcomes France's decision, stressing the move reinforces the growing international resolve to hold Moscow accountable for its actions in Ukraine.
The official wasn't authorized to discuss the matter publicly so spoke on condition of anonymity.
A senior NATO official said, "Unfortunately, Russia has made this kind of decision the only possible decision, by its actions." He spoke during a pre-summit briefing in Wales where NATO officials answered reporters' questions on the condition that they not be identified.
As recently as July, 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 the Russians had paid for the ship, and France would have to reimburse Moscow if it cancelled.
Robert Burns in Washington and John-Thor Dahlburg in Newport, Wales contributed to this report.