The British government will unveil a draft Brexit law on Wednesday to rewrite parts of its EU withdrawal deal, overshadowing the latest round of trade talks between both sides.
The EU has voiced concerns that the proposed legislation will breach the binding divorce treaty, which British MPs approved by a majority of by 358 votes to 234 in December.
Downing Street said its new UK Internal Market bill could change post-Brexit customs and trade rules in Northern Ireland.
The announcement has angered the 27 EU governments. They believe it breaches commitments made to protect the peace process and avoid a hard border on the island of Ireland.
"Clearly, any unilateral departure from the terms of the Withdrawal Agreement would be a matter of considerable concern and a very serious step," Irish Foreign Minister Simon Coveney said.
"Such a departure could seriously erode and damage political trust, not only in the Brexit negotiations."
Ursula Von Der Leyen, the head of the European Commission, warned the UK that implementing the withdrawal agreement was "an obligation under international law & prerequisite for any future partnership."
But Brandon Lewis, the British government's minister for Northern Ireland, told parliament on Tuesday that the proposed legislation would "break international law in a very specific and limited way."
The legislation will be published later Wednesday. It is unclear what the precise wording of the text will be.
Last year, the British government agreed that Northern Ireland would need to follow EU rules on goods.
The EU argued that installing any border infrastructure at the frontier between Northern Ireland and Ireland would breach the Good Friday Agreement that ended decades of conflict in the region.
It meant that Downing Street accepted that there would be a customs border down the Irish Sea.
Under the divorce treaty, Northern Irish businesses would need to fill out customs forms when shipping goods to mainland Britain. Checks would be carried out on goods in the other direction.
Ministers say the new law will define specific circumstances when the UK can override parts of the withdrawal agreement it ratified last year.
The government says it will be able to unilaterally decide which goods are "at risk" of entering the EU.
This week's talks are the eighth round of negotiations between the UK and the EU aimed at securing a relationship without tariffs and or customs checks.
The EU's chief Brexit negotiator Michel Barnier told French radio on Monday that he was "worried" about the chances of sealing a trade deal because the UK still wants "the best of both worlds."
His British counterpart, David Frost, said Tuesday the EU needs to show "more realism" and accept the UK's desire to be a sovereign state.
Disagreements still remain on future access to British waters for European fishing fleets and state aid.
Britain left the EU in January and faces a race against time to agree free trade deal before the end of the transition phase on December 31.
They will have to fall back on World Trade Organisation rules if no agreement is struck, which will mean new tariffs, border checks and other barriers to trade.
Talks are being held in London this week between the UK and the EU.