Litvinenko died days after being poisoned with radioactive polonium-210, which he is believed to have drunk in a cup of tea.
The finding by Robert Owen, a retired High Court judge, in a 328-page report represented by far the most damning official link between 43-year-old Litvinenko's death and the highest levels of the Kremlin.
Two Russian men, Andrei Lugovoi and Dmitry Kovtun, have been accused of his murder. They deny killing him.
Owen said that taken as a whole the open evidence that had been heard in court amounted to a "strong circumstantial case" that the Russian state was behind the assassination.
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But when he took into account all the evidence available to him, including a "considerable quantity" of secret intelligence that was not aired in open court, he found "that the FSB operation to kill Litvinenko was probably approved by [Nikolai] Patrushev [head of the security service in 2006] and also by President Putin".
"I'm also calling for the imposing of targeted economic sanctions and travel bans against named individuals ... including Mr Putin. I received a letter last night from the home secretary promising action. It [signalled] that the prime minister would do nothing in the face of the damaging findings of Sir Robert Owen," she said.
UK home secretary Theresa May is due to give the UK government's response to the findings in a statement to the House of Commons later on Thursday.
The findings will cause a significant diplomatic headache for the British government.
Litvinenko, a former agent in the Russian FSB federal security service (FSB) or secret police, had acquired British citizenship shortly before his death, after fleeing Russia six years earlier. British Prime Minister David Cameron will come under pressure to respond robustly to the state-sponsored assassination of a UK citizen on the streets of London, The Guardian reported.