A foreign ministry statement said the move would seriously damage bilateral relations, as well as security and stability in northern Europe.
Earlier, Finland's president and PM called for the country to apply for Nato membership "without delay".
It comes amid a surge in public support for Nato membership following Russia's invasion of Ukraine.
Finland shares a 1,300-km (810-mile) border with Russia. Until now, it has stayed out of Nato to avoid antagonising its eastern neighbour.
Finland will formally announce its decision on Sunday after it has been considered by parliament and other senior political figures.
Sweden has said it will announce a similar decision on the same day.
Nato Secretary General Jens Stoltenberg has said he expects the process of giving Sweden and Finland membership to happen "quite quickly".
The Russian statement (in Russian) described Finland's move as "a radical change in the country's foreign policy".
"Finland's accession to Nato will cause serious damage to bilateral Russian-Finnish relations and the maintaining of stability and security in the Northern European region," it said.
"Russia will be forced to take retaliatory steps, both of a military-technical and other nature, in order to neutralise the threats to its national security that arise from this."
However, Moscow has not specified what steps it plans to take.
"Everything will depend on how this expansion process plays out, the extent to which military infrastructure moves closer to our borders," Kremlin spokesman Dmitry Peskov earlier told reporters.
Russian officials were responding to a joint statement by Finnish President Sauli Niinisto and Prime Minister Sanna Marin, which said the two leaders expected a decision on Nato membership in the next few days.
"Nato membership would strengthen Finland's security," it said. "As a member of Nato, Finland would strengthen the entire defence alliance. Finland must apply for Nato membership without delay."
Speaking to journalists later, Mr Niinisto responded to Russian concerns and blamed the move on Moscow's invasion.
"Joining Nato would not be against anyone. You caused this. Look in the mirror," he said.
An opinion poll last week put support in Finland for joining Nato at 76%, with 12% against, a big swing towards membership since before the invasion.
Finland and the USSR were on opposing sides in World War Two, with the Finns famously fending off a Soviet invasion in 1939-40.
But Finland lost 10% of its territory in the final peace agreement and remained non-aligned throughout the Cold War.
Its accession to Nato would more than double the length of Russia's borders with the alliance. Sweden does not have a border with Russia.
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