The Federation Council voted unanimously to incorporate Crimea after Sunday's hastily called Crimean referendum, in which residents of the Black Sea peninsula overwhelmingly backed breaking off from Ukraine and joining Russia. Ukraine and the West have rejected the vote, held two weeks after Russian troops had taken over Crimea.
The move, already approved by the lower house, is set to be completed later Friday with Russian President Vladimir Putin's signature.
The U.S. and the European Union have responded by slapping sanctions on Russia. U.S. President Barack Obama ordered a second round of sanctions Thursday targeting members of Putin's inner circle and a major bank supporting them.
International agencies downgraded Russia's outlook, and Russian stock plummeted Friday.