It is alleged that Moscow has violated the terms of the 1987 Intermediate-Range Nuclear Forces Treaty - a historic pact that kept such deadly missiles out of Europe.
"Allies have concluded that Russian Federation has developed and fielded a missile system, the 9M729, which violates the INF Treaty and poses significant risks to Euro-Atlantic security", NATO foreign ministers said in a statement after a meeting.
A statement released by the NATO foreign ministers said: "Allies have emphasized that the situation whereby the United States and other parties fully abide by the treaty and Russian Federation does not, is not sustainable".
Russian Federation has denied USA and NATO allegations that it is violating the landmark treaty that banned an entire class of weapons.
"We strongly support the finding of the United States that Russian Federation is in material breach of its obligations under the INF Treaty", NATO foreign ministers said.
The U.S. has shared intelligence evidence with its North Atlantic Treaty Organisation allies that Russia's new SSC-8 ground-fired cruise missile could give Moscow the ability to launch a nuclear strike in Europe with little or no notice.
Mr Pompeo said the choice was to "bury our head in the sand" or "take common sense action" - arguing that the USA would "welcome a Russian change of heart" but had not seen evidence suggesting it is likely to comply.
North Korea soldier defects to South Korea: JCS
The two sides have been engaged in talks on the leaders' second meeting after the first, unprecedented, one in Singapore in June. The White House said he reaffirmed that plan during a meeting with Moon Friday on the sidelines of the G20 summit in Argentina.
The NATO partners on Tuesday also held talks with Ukrainian Foreign Minister Pavlo Klimkin.
But on Monday, the USA leader said he wants talks with his Chinese and Russian counterparts Xi Jinping and Vladimir Putin "to head off a major and uncontrollable Arms Race".
The INF was a bilateral treaty between the U.S. and the then Soviet Union, so it puts no restrictions on other major military actors like China.
President Trump and National Security Adviser John Bolton had previously suggested the US would withdraw from the treaty, but Pompeo's announcement Tuesday officially starts the clock.
"Russia must return to full and verifiable compliance; Russia's failure to do so will result in the demise of the INF Treaty", Pompeo told reporters.
Until then, Pompeo said, the United States would not "test or produce or deploy any systems" that would breach the treaty.
Germany, the Netherlands and Belgian are concerned about the deployment of USA missiles in Europe, as happened in the 1980s.
"Abandoning the INF Treaty would be a step toward a new arms race, undermining strategic stability and increasing the threat of miscalculation or technical failure leading to an immensely destructive war", they wrote in the Washington Post in a commentary published minutes after Pompeo's announcement.