It also imposes financial sanctions against Iran and North Korea.
It has not yet been confirmed how many embassy staff the U.S. has in Russian Federation.
Even if Trump had chose to veto the bill, Congress could likely have mustered enough votes to override him.
That reduced number would match the number of Russian diplomats now in the United States.
Moscow ordered the United States to reduce its diplomatic presence in Russian Federation to 455 diplomats and staff, and also barred it from using a Moscow summer house and storage facility.
The timing of the announcement - late on a summer Friday, amid headlines about White House staff turmoil - ensured relatively little coverage for what analysts called a major development in U.S. -Russia relations.
"Russian President Vladimir Putin, speaking ahead of the Senate vote, accused USA lawmakers of 'insolence' and promised retaliation if the sanctions become law", as NPR's Scott Neuman reported Thursday.
Earlier on Thursday, a senior White House aide said Trump could veto the pending legislation in order to push for a tougher deal, an idea that drew skepticism in Congress because his administration had spent weeks lobbying for a weaker bill. "This is the rationale and the standard for our European sanctions, no more, but not less", he said. Moscow is also barring Americans from using two diplomatic facilities.
Russia's Foreign Ministry ordered a reduction in the number of USA diplomats in Russian Federation on Friday and said it was closing down a US recreational retreat in response to fresh sanctions against Russian Federation.
Opposing the bill could be politically awkward for a White House that's been accused of going easy on Russian Federation.
But allegations from the U.S. intelligence community that Putin interfered in the United States elections to get Trump elected have made any concessions to Trump politically toxic.
"It's time to respond to Russia's attack on American democracy with strength, with resolve, with common goal, and with action", he said.
"This bill doesn't preclude him from issuing tougher sanctions".
Russian Foreign Minister Sergei Lavrov told U.S. Secretary of State Rex Tillerson in a phone call later on Friday that Moscow was forced to respond to what he described as "illegal sanctions against Russia, libelous statements against it, a massive expulsion of diplomats and expropriation of our diplomatic property".
The new package of sanctions aims to hit President Vladimir Putin and his inner circle by targeting allegedly corrupt officials, human rights abusers and crucial sectors of the Russian economy, including weapons sales and energy exports.
"We haven't seen the final version yet, so we haven't got any kind of definitive view on it", Putin said, "but we can see that over a lengthy period they are trying to provoke us more and more". He said: "It is a great pity that Russian-US relations are being sacrificed to resolve questions of domestic politics". CNN has reported that the U.S. and Afghanistan have accused Russian Federation of arming the Taliban, a charge Moscow denied.
The bill is expected to easily pass the Senate.