President Vladimir Putin accepted the resignation of his prime minister after proposing constitutional amendments that could herald his intention to carve out a position that would let him stay at Russia's helm after his presidency ends.
Russian prime minister Dmitry Medvedev, who served as a placeholder president in 2008-2012 to allow Mr Putin to observe term limits, said in televised comments that he needed to resign in light of his mentor's proposed changes in government.
Mr Putin thanked Mr Medvedev for his work and appointed him as the deputy head of the presidential Security Council.
Vladimir Putin suggested a nationwide vote on proposed constitutional amendments: "Everything must be ultimately decided by the people"
- President of Russia (@KremlinRussia_E) January 15, 2020
In his state of the nation address earlier in the day, Mr Putin suggested amending the constitution to allow politicians to name prime ministers and Cabinet members.
The authority to make those appointments currently belongs to Russia's president.
"It will increase the role of parliament and parliamentary parties, powers and independence of the prime minister and all Cabinet members," Mr Putin told an audience of top officials and politicians.
At the same time, Mr Putin argued that Russia would not remain stable if it were governed under a parliamentary system.
The president should retain the right to dismiss the prime minister and Cabinet ministers, to name top defence and security officials, and to be in charge of the Russian military and law enforcement agencies, he said.
Mr Putin emphasised that constitutional changes must be put to a nationwide vote.
Mr Putin's current term expires in 2024, and Russia's political elites have been abuzz with speculation about his future plans.
The 67-year-old Mr Putin has remained at the helm for more than 20 years - longer than any other Russian or Soviet leader since Josef Stalin.
He will have to step down after his term ends under the current law, which limits the president to two consecutive terms.
Political analyst Kirill Rogov said that Mr Putin's proposals indicate his intention to remain in charge while re-distributing powers between various branches of government.
"Such a model resembling the Chinese one would allow Putin to stay at the helm indefinitely while encouraging rivalry between potential successors," Mr Rogov said on Facebook.
Alexei Navalny, the most prominent Russian opposition leader, tweeted that the president's speech signalled Mr Putin's desire to continue calling the shots after his term ends.
"The only goal of Putin and his regime is to stay in charge for life, having the entire country as his personal asset and seizing its riches for himself and his friends," Mr Navalny alleged.
Mr Putin served two presidential terms in 2000-2008 before shifting into the prime minister's seat for four years to observe the term limit.
Mr Medvedev kept his seat warm and then stepped down after just one term to allow his mentor to reclaim the top job in 2012.
While in office, Mr Medvedev raised the presidential term from four to six years.
While Mr Putin continued calling the shots during Mr Medvedev's presidency, he was not quite happy with his performance.
#Constitution: Russia must remain a strong presidential republic. The President should be able to relieve the Prime Minister and deputy PMs
- President of Russia (@KremlinRussia_E) January 15, 2020
He was particularly critical of Mr Medvedev's decision to give the green light to the Western air campaign over Libya in 2011 that led to the ousting and the killing of long-time dictator Muammar Gaddafi.
Mr Medvedev's decision to step down after one term to let Mr Putin return to the presidency also sparked massive protests in Moscow in 2011-2012 in a major challenge to the Kremlin.
Observers speculated that Mr Putin may stay in charge after 2024 by shifting into the prime minister's seat after increasing the powers of parliament and the Cabinet and trimming presidential authority.
Political analyst Dmitry Oreshkin said Mr Putin's speech made it clear he was pondering the move to the premiership.
"Putin is advancing the idea of keeping his authority as a more powerful and influential prime minister while the presidency will become more decorative," Mr Oreshkin said.
Other potential options include a merger with neighbouring Belarus that would create a new position of the head of a new unified state, a prospect rejected by Belarus President Alexander Lukashenko.
In his address, Mr Putin said the constitution must also specify the authority of the State Council consisting of regional governors and top federal officials.
Some analysts have theorised that Mr Putin may try to continue pulling the strings as head of the council after stepping down as president in 2024.
Mr Putin also emphasised the need to amend the constitution to give it a clear priority over international law.
"The requirements of international law and treaties and decisions of international organs can only be valid on the territory of Russia as long as they don't restrict human rights and freedoms and don't contradict the constitution," he said.
He also said that the constitution must be tweaked to say that top government officials are not allowed to have foreign citizenship or residence permits.
Mr Putin focused his state of the nation address on the need to encourage population growth by offering additional subsidies to families that have children.
The Russian leader said Russia would remain open for cooperation with all countries while maintaining a strong defence capability to fend off potential threats.
He added that new weapons systems would protect Russia's security "for decades ahead".
"For the first time in history, we aren't trying to catch up with anyone," Mr Putin said.
"On the contrary, other leading nations are yet to develop the weapons that Russia already has."