Despite enjoying strong ties with the Kurdistan Regional Government (KRG) in recent years, Turkey fears Monday's vote could stoke separatist aspirations among its own sizeable Kurdish minority.

Prime Minister Binali Yildirim said a team from relevant Turkish ministries were working on the details of sanctions, in a live television interview.

He added that as the crisis had reached a "point of no return," the coming process would herald "unpleasant developments."

"We will take those steps with regard to air space, and how the border gates will be governed before it is too late," he said, without giving further details.

He called the referendum a "theatre" and said Ankara from now on would consider the central government in Baghdad as the legitimate interlocutor, not the regional government in northern Iraq.

But the government denied media reports it had closed its southern border gate with northern Iraq in response to the independence referendum, but said strict controls were in place.

"Habur border gate has not been closed," Customs Minister Bulent Tufenkci was quoted as saying by the state-run Anadolu news agency. "A tight control is in place for security reasons."

Witnesses in the region also said the border gate remained open but cross-border traffic was slow.

Iraqi Kurds were casting their ballots in the non-binding vote on independence on Monday, despite warnings from Baghdad as well as Iran and Turkey.

Mindful of the consequences, Turkey has never made clear what concrete action it might take against the regional government of Massud Barzani.

Business sources quoted in the press have warned the closure of the Habur border gate could undermine $7 billion (5.8 billion euro) trade between Ankara and Arbil.

Yildirim also emphasised that Turkish counter measures would target any "terror elements" who were encouraged by the referendum and then took aim at Turkey's national security.

"Our citizens should not worry, we are not going into a war," he said. "They (Turkish measures) are pinpoint operations."

Last week, Turkey launched a military drill on the Iraqi border, which was continuing with the involvement of additional troops, reports said.

Yildirim said Monday he had information that military personnel, officers and specialists from Iraq would also join the border exercise.