The US ordered the closure of several Russian-owned buildings in September in retaliation for the expulsion of hundreds of US diplomats from its Moscow embassy.
And now Russian Foreign Minister Sergey Lavrov has announced his intent to reclaim its properties through legal action.
In a telephone call with US Secretary of State Rex Tillerson, Mr Lavrov also criticised the “unacceptable” removal of Russian flags from the seized buildings.
The Russian foreign ministry said Mr Lavrov told his US counterpart: “The lawlessness continued by US officials runs counter to declarations made at the highest level in Washington about intentions to normalise the bilateral relations, which have hit an all-time low.”
The lawsuit is the latest development in a long-running diplomatic spat between the rival nations and comes at a time of heightened tensions over a possible conflict on the Korean Peninsula.
When asked to respond to Mr Lavrov’s accusations on removing the Russian flag, US State Department spokeswoman Heather Nauert told reporters the actions were “perfectly legal” and carried out with “a lot of thought” in a “judicious fashion.”
She said: ”The flags of the former Russian consular properties in San Francisco were respectfully lowered. They’re safely stored within each of the buildings.
“There’s no country in the world that pays greater respect to its own flag and to the flags of other nations.
“That is something that we take seriously.”
Relations between the US and Russia have been strained for decades, but President Donald Trump has expressed a desire to improve ties.
During his 2016 campaign, Mr Trump praised Mr Putin’s leadership abilities and said it would “be a great thing if we could get along Russia”.
But despite positive signs for closer links following the pair’s first meeting at the G20 in July, relations have since deteriorated.
Shortly after their G20 encounter, the Kremlin expelled 455 embassy from Russia, a total which included American diplomats and the facility’s Russian staff.
The move was in response to Barack Obama’s decision to kick 35 Russian diplomats out of the US in the final stages of his presidency.
And in August, the US imposed fresh sanctions in a move Moscow described as an “all-out trade war”.