Speaking from Kyiv, Ms Truss said the UK stood “shoulder to shoulder” with Ukraine in the face of the continuing Russian military build-up.
In a keynote speech, she said there was still time for Moscow to “step back from the brink” and to take the path of diplomacy.
“We are ready to talk,” she said.
“But we are very clear – if they decide to continue down the path of aggression, there will be massive consequences bringing Russia severe economic costs and pariah status.”
At the same time, however, she said that, even if Moscow does pull back its forces which have been massing on the Ukrainian border, “the problem will not have gone away”.
She said it represented a “litmus test” for the West and that it was essential now for Nato allies to invest in defence and deterrence and to press ahead with alliance modernisation.
“The free world needs to draw the line under a decade of drift,” she said.
“If we hang back, that would only embolden the bullies in their campaign against sovereignty and the right of self-determination.
“This is a litmus test for the West.
“We must stand up to and defuse Russian aggression now, because if we don’t it will embolden not only the Kremlin, but aggressors, authoritarians and autocrats everywhere.
“What matters here in Eastern Europe matters for the world and it matters for the future.
“We have a duty to ensure the next 10 years are better than the last.”
Ms Truss said the “spectre of Russian aggression” had long hung over eastern Europe, threatening security and stability for the wider world.
While Russia faced no threat from Nato or Ukraine, she said “accommodating illegitimate Russian concerns would not make their threats disappear. Instead Russia would be emboldened”.
She said that the West needed to publicly take on and challenge Russian “falsehoods” such as claims the Ukrainian “revolution of dignity” in 2014 was really a coup d’etat.
“For years now, Russia has been building its capabilities, violating its commitments and probing our weaknesses,” she said.
“The West needs to wise up. We need to work together to discredit their arguments in public.”
“We should use our intelligence strategically to challenge their narrative – as we did last month, exposing the Kremlin’s plan to install a pro-Russian leader in Kyiv and exposing their military build-up on the border.”
Ms Truss pointed to the example of China, expressing surprise that Beijing had aligned itself with Moscow.
She said that if China wanted to be seen as a “responsible global actor” it should be urging the Kremlin to draw back from an attack on Ukraine.
“Beijing is increasing its assertiveness and expanding its armed forces at breakneck speed.
They are upending the rule of law to create no-go areas in the South China Sea, and conducting military flights near Taiwan,” she said.
“But China is not the same as Russia. They claim a policy of non-interference.
That’s why it is surprising to see China’s leaders aligning themselves with the Kremlin.
“If China wants to be seen as a responsible global actor they should be doing everything possible to ensure that Russia steps back.”
“The world is watching to see whether their actions contribute to peace and stability, or to fuelling aggression.”
Ms Truss called for the international community, including Russian and China, to recommit to the principles of arms control with “concrete measures” to reduce the risk of nuclear war.
At the same time she said that Western allies had to be ready to accept the economic “pain” of imposing sanctions, including blocking the Nord Stream 2 gas pipeline from Russia, for the sake of long-tern security.
“In dangerous times, we have to take a hard-headed approach,” she said.
“That includes being ready to accept short-term pain for long-term gain, whether through imposing tough sanctions or cutting strategic dependence by opposing Nord Stream 2.
“This is how we will ensure that the next ten years are defined not by danger and drift, but by strength and stability.”
Additional reporting by PA Media