Prime Minister Vladimir Putin said: "An agreement with the organizing company has been reached," Putin told investors in the Black Sea resort city of Sochi.

"In order to organize the work properly, we should create a management company here, in our country. It should consist of private national companies," Putin said.

"Russia has the right to stage races over six years with a prolongation for another five years," the premier said.

F1 kingpin Bernie Ecclestone came to Sochi to sign the agreement.

Under the agreement, some of the country's biggest companies, including state-run corporation Rostekhnologii, cell phone provider Megafon, oil producer LUKoil, and aluminum giant RusAL, will invest in the construction of an F1 circuit near Sochi.

Russia has never staged an F1 race before and previous bids to bring the sport to the country have fallen through.

Russia's F1 evangelist Alexei Popov told the Vedomosti newspaper that attracting F1 was made possible "only due to the political will of high-profile officials."

Source: Rianovosti