A referendum will be held on March 16, which was decided upon by Crimea's regional assembly behind closed doors, to ratify the decision to secede from Ukraine and become a part of the Russian Federation.
The interim government in Kiev has denounced the movement, saying that it will invalidate the decision to dissolve the Crimean Parliament, and have issued a warrant for the arrest of Sergei Aksyonov, the leader of the breakaway and declared prime minister following a hostile takeover of the Parliament building in Crimea last week.
President Obama has likewise stated that sanctions will be placed upon Russia in response to its military occupation of the peninsula.
Geographically, Crimea makes more sense to belong to Ukraine. The peninsula was ceded to Ukraine in 1954 because it is physically attached to the mainland Ukraine, which supplies all of its water and power, and makes administration much easier.
Although Putin had made mention that he did not foresee the secession of Crimea, he and several leaders in Russia are backing the move now that it's taking place.