Donald Trump has praised Russian president Vladimir Putin for ruling out a tit-for-tat expulsion of US diplomats.
Mr Putin announced that no American embassy staff will be expelled after Washington expelled 35 Russians because of alleged Russian cyber attacks.
In a tweet, the US president-elect described the decision as a great move.
Mr Trump said he always knew Mr Putin was "very smart".
US president Barack Obama and Vladimir Putin. The US has fired back at Moscow over its meddling in the presidential election, announcing tough sanctions against intelligence. Photo: AFP
Russia's foreign ministry formally asked Mr Putin to expel 35 US envoys, but Mr Putin said Russia would not "stoop" to the level of "irresponsible diplomacy".
He said he would work to restore ties with the US under Mr Trump.
Russia denies involvement in hacking related to the US election, calling the sanctions "ungrounded".
Prime Minister Dmitry Medvedev accused the US administration of President Barack Obama of ending in "anti-Russian death throes".
Mr Putin indicated the children of US diplomats in Moscow would be invited to New Year celebrations in the Kremlin.
Under the US action taken on Thursday:
Thirty-five diplomats from Russia's Washington embassy and its consulate in San Francisco were declared "persona non grata" and given 72 hours to leave the US with their families.
Two properties said to have been used by Russian intelligence services in New York and Maryland will be closed.
Sanctions were announced against nine entities and individuals including two Russian intelligence agencies, the GRU and the FSB.
Mr Obama, who will be replaced by Donald Trump on 20 January, vowed action against Russia amid US accusations that it directed cyber-attacks on the Democratic Party and Hillary Clinton's campaign.
Emails stolen from her campaign manager and from the servers of the Democratic National Committee - some containing embarrassing information for Democrats - were released during the election campaign.
A spokesman for Mr Trump said he had no immediate plans to talk with Mr Putin about the Russian diplomat expulsion.
"There is nothing scheduled at this time. The priority right now is for the president-elect to get an update next week from the intelligence community," he said.
- BBC / REUTERS