The Russian government has announced plans to increase the nation's defence budget by 40% during the coming year.
Morale is said to be low in the Russian army
Some of the extra 70 billion roubles (£1.3bn or $2.5bn) will be allocated to improving pay and conditions of service for troops.
The money will be also used to increase the number of full-time regiments, as opposed to conscript units.
Russian President Vladimir Putin said extra spending was needed as Russia was facing complex defence tasks.
The procurement budget includes everything from fighter aircraft and new rockets to basic supplies for the military.
The plan envisages two new full-time divisions, bringing the professional army's strength to about 50,000 by the end of next year.
The proposals were agreed during a meeting called by Mr Putin on Thursday, the fourth anniversary of the sinking of the Kursk submarine during naval exercises that led to the death of 118 sailors.
The meeting was attended by senior military and economic officials including the Defence Minister, Sergei Ivanov, and the Finance Minister, Alexai Kudrin.
Mr Kudrin said monetary allowances were to be increased, to compensate in part for the loss of free public transport, and a housing credit scheme for longer-serving soldiers would be extended.
The decline of Russia's armed services has been unmistakeable for more than a decade.
A report by Human Rights Watch published last year said conscript soldiers in the Russian army were routinely denied access to adequate food and medical care.
The Russian army drafts almost 500,000 young men each year, but it is beset by
problems including desertion, draft dodging, bullying and suicide.
Correspondents say morale is low in the Russian military, which has been bogged down in operations in the breakaway region of Chechnya and whose lack of funding has hampered the pace of reform.
Mr Ivanov is due to meet US Defence Secretary Donald Rumsfeld in St Petersburg on Saturday to discuss military co-operation.
The escalating tensions in Georgia's breakaway province of South Ossetia are expected to be on the agenda. Russia has peacekeeping forces in the region and Washington has recently held talks with Georgian President Mikhail Saakashvili.