ISIS has repeatedly used low-grade chemical weapons, primarily sulfur mustard, in Syria and Iraq.
The new sanctions, which would bar access to any property or interests under US jurisdiction, target Attallah Salman 'Abd Kafi al-Jaburi and Marwan Ibrahim Hussayn Tah al-Azawi, two ISIS leaders involved in the development of chemical weapons, according to the State and Treasury departments.
Al-Jaburi was a senior ISIS leader who oversaw some of the terror group's improvised explosive device factories while also being involved in the development of chemical weapons in Iraq, according to a Treasury Department statement accompanying the announcement.
A member of al Qaeda since 2003, al-Jaburi received chemical weapons training in Syria before returning to Iraq in 2015, the statement said.
The State Department said al-Azawi is involved in ISIS' development of chemical weapons for use in ongoing combat against the Iraqi security forces.
"Today's actions mark the first designations targeting individuals involved in ISIS' chemical weapons development," the Treasury Department's Office of Foreign Assets Control's director, John E. Smith, said in a statement accompanying the announcement.
While the sanctions target leaders involved in ISIS chemical weapons operations in Iraq, US officials have told CNN that the military believes ISIS has been transferring its chemical weapons expertise and stockpiles from Iraq to Syria as part of a "new chemical weapons cell."
The cell which is comprised of chemical weapons specialists from Iraq and Syria who have not previously worked together is being set up in an ISIS-controlled area of Syria within the Euphrates River Valley, just across the Iraqi border.
There has been a significant uptick in low-grade chemical weapon use by ISIS as the terrorist organization fights to hold onto Mosul.
Military officials told CNN there have been more than 15 chemical weapons attacks since April 14 in or around West Mosul. While there have been no US or coalition casualties, some Iraqi troops have been treated for injuries.
A stockpile of specially equipped rocket-propelled grenades was recently discovered by Iraqi troops fighting in Mosul, representing a new chemical weapons delivery mechanism according to one US official.
Military officials have downplayed the effectiveness of ISIS' chemical weapons, saying they have less battlefield effect than conventional explosives.