Brown, speaking at a news conference with President Bush at 10 Downing Street in London, said Britain will work to persuade Europe to follow suit, according to the Associated Press.
"Action will start today in new phase of sanctions on oil and gas," Brown said. "We will take any necessary action so that Iran is aware of the choice it needs to make."
A spokeswoman for European Union foreign affairs and security chief Javier Solana, said EU foreign ministers meeting in Luxembourg on Monday were prepared to take formal action and agreed in principle on the need for stronger sanctions.
"It is clear they are ready to move further. We will definitely take a formal decision," Cristina Gallach said, although she would not speculate on the timing of a final decision.
The British leader said that assets of Iran's Bank Melli would be frozen -- last year, the U.S. accused the bank of providing services to Iran's alleged nuclear and ballistic missile programs.
The U.N. Security Council has imposed three sets of limited sanctions against Iran for refusing to halt uranium enrichment, a technology that can both produce nuclear fuel and turn out the material needed for nuclear warheads.
The U.S. and some of its allies accuse Iran of trying to develop nuclear weapons. Iran denies that, saying its atomic program is aimed at using nuclear reactors to generate electricity.
Iran again ruled out suspending enrichment on Saturday and dismissed a package of political and economic incentives put forward by the six world powers attempting to negotiate with Tehran.
"We will do everything possible to maintain the dialogue, but we are also clear that if Iran continues to ignore united resolutions and continues to ignores our offers of partnership, we have no choice but to intensify sanctions," Brown said.
Brown said he will press European colleagues at a summit in Brussels, Belgium later this week to agree a tougher package of European Union sanctions against Iran. The EU imposes its own set of measures against Iran, in addition to U.N.- backed sanctions, which include a total arms embargo and travel bans against a number of named individuals and organizations, the AP reported.
Brown also promised to send more troops to try to curb resurgent violence in Afghanistan, but did not say how large a force would go.
"Today Britain will announce additional troops for Afghanistan, bringing our numbers in Afghanistan to the highest level," he told reporters, according to Reuters.
Britain, a top troop contributor to the NATO force fighting Taliban and al Qaeda insurgents, has about 7,800 troops in Afghanistan, mostly in Helmand province. Since 2001, more than 100 British soldiers have died during the mission.
Brown also voiced continued support for the U.S.-led operations in Iraq, providing a welcome boost for Mr. Bush at the end of his final trip to Europe as president.
"In Iraq, there is a job to be done," Brown said, according to the Washington Post. "There's going to be no artificial timetable. And the reason is we're making progress."