Belarus has asked Sweden to pull its diplomats out of Minsk after it said it is withdrawing all of its embassy staff from Stockholm, a statement said.
"The Belarusian side has been forced to make the decision to recall its embassy staff from Sweden and return all of the staff to Belarus," a statement from the Belarusian Foreign Ministry said. "The process is already underway."
Sweden is advised to withdraw its embassy staff from Minsk by August 30, the statement added.
The move comes just over month after a Swedish light plane dropped hundreds of teddy bears bearing pro-democracy slogans over Belarus.
Belarus earlier refused to renew the accreditation of Sweden's ambassador, Stefan Eriksson.
The European Commission has also pledged to take retaliatory measures against Belarus.
The EU Political and Security Committee will gather for an urgent meeting in Brussels to discuss the situation surrounding Eriksson’s expulsion, Sebastien Brabant, a deputy spokesman at the European Commission said without disclosing the date of the meeting.
According to the diplomatic sources, the EU states’ ambassadors will meet on August 10 in Brussels.
Belarusian President Alexander Lukashenko sacked a number of top officials over the teddy bear stunt, which took place on July 4.
Lukashenko, in power since 1994, has been accused by western governments of cracking down violently on dissent.
His re-election for a four term in 2010 was marred by allegations of vote-rigging.
