Nato secretary general Jens Stoltenberg announced that although the alliance did not seek a new arms race with Russia, it would boost its defences in Europe following the country's alleged involvement in unrest in east Ukraine.
Ministers are expected to increase the size of Nato's rapid response force in Europe to 40,000 personnel, with the US announcing recently that it would deploy heavy military equipment in Soviet Bloc states bordering Russia.
In response to the US plans, Russian President Vladimir Putin said his country would increase its nuclear arsenal with 40 new missiles.
Stoltenberg rejected Russian claims that the move constituted a "provocation". Speaking to reporters at the start of a meeting of alliance defence ministers, reports Reuters, he said: "We will not be dragged into an arms race, but we must keep our countries safe.
"This is... a prudent and a necessary response to what we have seen from Russia over a long period of time.
"What Russia has done in Ukraine is not defensive. To annex a part of another country is not defensive... that is an act of aggression.
"They are also using now nuclear rhetoric and more nuclear exercises as part of their defence posturing. All of this creates a new security environment."
US Secretary of Defence Ash Carter told ministers at the meeting that Lithuania, Estonia and Latvia, as well as Poland, Bulgaria and Romania had agreed to host the equipment, including tanks and armoured personnel carriers.
In recent months, tensions between the West and Russia have reached their lowest point since the Cold War, with Moscow accused of providing soldiers, military equipment and weapons to separatist militant groups fighting in east Ukraine, charges Russia denies.
Nato increased the size of its response force to 30,000 troops in February, with a 5,000 strong "spearhead force" able to deploy within days not months.