Russia on Thursday signed a deal to host its first Formula One Grand Prix from 2014 in the city of Sochi, the same year the Black Sea resort hosts the Winter Olympics.
According to an agreement signed by Formula One supremo Bernie Ecclestone in the presence of Prime Minister Vladimir Putin, the city and its Krasnodar region won the rights to host the race between 2014 and 2020.
The contract could be extended for another five years.
"On the whole, agreement with the organising company has been reached," Putin said in comments confirmed to AFP by his spokesman.
Ecclestone, speaking to Putin earlier in the day, praised the long-awaited deal.
"I am very happy that Formula One will take place in Russia," he said in comments carried by Russian news agencies.
Russia's Vitaly Petrov became the country's first ever F1 driver when he was chosen to drive for Renault in the 2010 season, and the competition is widely followed in the country.
The hosting of the Grand Prix is the latest ambitious sporting plan championed by Putin, who was instrumental in bringing the Olympics to Russia and is also lobbying hard for the country to host the football World Cup.
Russia came close to hosting a Formula One Grand Prix in 2002 when a deal that was to be signed in Moscow collapsed amid a last-minute dispute over financial terms.
"I know that you met and had negotiations about building a Formula One circuit even with (Soviet leader) Leonid Brezhnev" who died in 1982, Putin told Ecclestone, according to the ITAR-TASS news agency.
"Finally, we've solved this issue after decades of talks," he added.
Putin said Russia would be able to use the infrastructure being built ahead of the Sochi Olympics for the Grand Prix and said the event would increase the popularity of sport with young people in Russia.
Alexander Tkachev, governor of the southern Krasnodar region that includes Sochi, told ITAR-TASS that the Grand Prix would be held in the Sochi Olympic Park that is being built for the Games.
It is expected that the track will use existing infrastructure as well as new pieces of road.
A delegation of Russian businessmen also attended the meeting. Putin said a managing company would be created consisting of several firms who would organise the Grand Prix.
Ecclestone told local media earlier this month that after several rounds of negotiations with the Russian authorities the conditions for the contract had been agreed.
He said the annual fee Russia would pay for hosting a Grand Prix would be comparable to the 40 million dollars paid by new Grand Prix hosts Singapore and Abu Dhabi.