Russia has been given 20 days to vacate the site in Yarralumla, near Parliament House, after it had failed to commit to funding and a completion date.
Authorities in Canberra have seized prime land allocated for the construction of a new Russian embassy under a"use it or lose it policy".
"We've been in discussions with the Russian federation for many years about the progress of their new embassy," Ms Barnes said. "The Russian federation acknowledges they're in breach of their lease and when we asked them for an indication for a completion date or commitment of funding towards the new embassy they weren't able to provide it.
However construction has been plagued with delays and financial problems, including reports of espionage.
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