Learn English – How does a word come to have two completely opposite meanings

According to Steven Pinker, in The Stuff of Thought:

Homonymy usually arises when an ancestral word budded off new senses in a language's history and current speakers retain no inkling of the original connection. For instance, the word odd originally referred to something that stuck out, like the point of a triangle. Then it was extended to refer to something that metaphorically stuck out because it was unusual, and then was extended further to refer to a number that had one unit sticking out from a pair.

Homophony, on the other hand, is defined as a phenomenon

in which distinct words are pronounced the same way, usually because their original pronunciations got merged in the history of the language. For example, four and fore sound alike today, but four originally rhymed with tour, and fore originally rhymed (more or less) with flora; we see fossils of the old pronunciations in the way the words are spelled.

What's happened is that the verb to sanction has retained the original sense relating to endorsement/recognition by official decree.

But the noun sanctions (invariably pluralised, frequently imposed or applied) has come to mean measures taken by authority (often, multiple cooperating authorities) to discourage unsanctioned activities. By default, it's usually governments restricting trade in certain goods and services with some other nation, in order to put pressure on its government.

There is also the "positive" singular noun give (ones) sanction, but as that link shows, it's rapidly declined as the "negative" plural noun impose sanctions has gained currency.

Although superficially this looks odd, in practice there's unlikely to be any confusion because the verb / plural noun distinction is almost always made.

Having said all that, usage does change. Increasing numbers of younger speakers rarely hear the verb or singular noun form with positive associations, and they effectively "back-form" a new verb form they want to mean to impose sanctions. @Jay has identified a few such usages already in "print", and much as they make me cringe, doubtless there will be more in future.