Pro-Ukrainian activists broke into 5 Belgrave Square just after midnight before hanging flags and a banner reading: "This property has been liberated."
A second banner draped over the £50million mansion added: "Putin go f*** yourself."
The squatters appear to be linked with Resist London, a protest group whose members describe themselves as "anarchists".
Speaking to GB News, one of the activists said: "We are doing what Boris can't.
"We are seizing the property of people who supported the war, and giving them to the victims of war. Victims of these people.
"What we want to do is give these properties to people who run away from war. Their home was destroyed, they lost their family and friends. It's horrible.
"It's the least we can do but it's so far from what we need.
"I've been waiting for Priti Patel's first statement, every time it's the same f***ing song: 'Where are we going to put them?'
"I say, don't worry Priti Patel, we've done the work for you. We'll take care of them, don't worry!"
A statement confirming they are behind the break-in reads: "We are anarchists. We occupy this property in protest against Putin and his world.
"This mansion belongs to a Russian oligarch complicit in Putin's invasion of Ukraine.
The property belongs to Russian oligarch Oleg Deripaska
Jonathan Brady
The squatters are linked to anarchist group Resist London
Jonathan Brady
"Do we need to remind you why Putin sucks? The invasion of Ukraine is only the last episode in a long series from the support of Assad in Syria to concentration camps for LGBTQ+ people, ecocides, massive wealth inequality, brutal repression of political opponents, and so on.
"By occupying this mansion, we want to show solidarity with the people of Ukraine, but also the people of Russia who never agreed to this madness. As always with wars, empires benefit and common people pay the price.
"We want to show our sympathy to the brave protesters who have been fighting in the belly of the beast, and suffer unjust imprisonment for standing up to Putin.
"We say with you: Putin, go f*** yourself.
"Finally, we want to say a word about the elites here in the UK who have been Putin's minions for years.
"You received bribes, you managed oligarchs' assets, you even adopted Putin's authoritarian attitude to protest and dissent. F*** you too.
"This rich mansion will serve as a centre for refugee support, for Ukrainians and people of all nations and ethnicities.
"SQUAT OLIGARCHS' PROPERTIES EVERYWHERE."
Mr Deripaska, who has stakes in energy and metals company En+ Group, is one of the seven Russian oligarchs recently sanctioned by the Government.
He was described as “a prominent Russian businessman and pro-Kremlin oligarch”, who is “closely associated” with both the Kremlin and Vladimir Putin.
His wealth is estimated to be £2.3billion and he has a multimillion-pound property portfolio in the UK which, according to a 2007 High Court judgment, includes the house at 5 Belgrave Square.
Records indicate it has not changed hands since and is owned by an offshore British Virgin Islands company.
The property is considered to be London's most expensive terraced house, and previously belonged to society diarist Sir Henry 'Chips' Channon.
A Metropolitan Police spokesperson said: "Police were called shortly after 01:00hrs on Monday March 14 to a residential property in Belgrave Square, SW1.
"Officers attended and found that a number of people had gained entry and hung banners from upstairs windows. Officers remain at the location."