The European Union will reduce its financial assistance to Turkey and halt high-level talks with the country as part of a set of sanctions over oil and gas drilling off the coast of Cyprus.

EU foreign ministers who met in Brussels on Monday decided to reduce the pre-accession assistance to Turkey for 2020 by €145.8 million. They also suspended negotiations on an aviation agreement and halted high-level bilateral talks between the two countries.

Finally, they invited the European Investment Bank — the EU's not-for-profit lending institution — to review its lending activities in Turkey, which totalled €358.8 million last year.

The Council once again called on Turkey to refrain from any drilling activities off the coast of Cyprus and instead, "act in a spirit of good neighbourliness and respect the sovereignty and sovereign rights of Cyprus in accordance with international law."

It also said that "it remains seized of the matter" and that the bloc's top diplomat and the EU Commission will "continue to work on options for targeted measures."

READ MORE: Turkey-Cyprus dispute: Why are the two countries arguing over drilling rights?

Turkey sent a first drilling ship off the coast of Cyprus two months ago. The Republic of Cyprus legally has sovereignty over the whole island but it has been de facto partitioned with the self-declared Turkish Republic of Northern Cyprus since the 1974 Turkish invasion.

The EU condemned the move as "illegal" but Ankara says the exploration is legal because it is in the territorial waters of what it calls Northern Cyprus. Turkey is the only country to recognise the territory as such and inflamed tensions by sending a second drilling ship, which arrived in the area last week.

In a statement issued on Tuesday, Turkey's foreign ministries said the EU sanctions "will in no way affect Turkey's determination to continue its hydrocarbon activities in the Eastern Mediterranean."

"These conclusions demonstrate how prejudiced and biased the EU is with regard to Cyprus as they make no reference to the Turkish Cypriots, who have equal rights over the natural resources of the Island, in total disregard of their existence in Cyprus," it added.

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