Russia will host grand prix races near the Black Sea resort of Sochi starting in 2014 after signing a six-year deal with Formula One chief Bernie Ecclestone on Thursday.
Ecclestone and a regional Russian construction official penned the deal in Sochi, which is also hosting the 2014 Winter Olympics. Russia's Prime Minister Vladimir Putin met with Ecclestone and attended the signing.
Russia has tried to get on the F1 circuit before, but former Moscow Mayor Yuri Luzhkov failed to reach an agreement with Ecclestone in 2002 to use the capital as a venue.
The six-year deal also includes an option to extend it for a further five. Russian media reported that the deal would cost Russia at least $40 million a year.
"I sincerely hope that the Formula One is going to play a big part in what I can see happening in Sochi," Ecclestone said. "I'm sure the circuit can be a super circuit. It's all the things we need and wanted, and we are very happy."
The F1 chief praised the work of Russia's sports organizers, saying: "They are trying to build absolutely first-class facilities both for the Olympics and the Formula One."
Putin also met separately with top Russian businessmen to encourage them to support the event.
"Formula One isn't only the most prestigious competition in motor sport, but it also demonstrates achievements in car manufacturing," Putin said.
Russia is halfway through a mammoth construction effort to build facilities for the 2014 Winter Games, a project originally slated to cost $12 billion but now expected to cost multiples more.
Holding Formula One races there could ensure some of the infrastructure, such as hotels, remain utilized in the years following the Games, satisfying demands from the International Olympic Committee for a legacy.
"For us it's an important event because it would be possible to use effectively everything we have created for the Olympic Games in 2014," Putin said.
Motor racing is hugely popular in Russia and was made even more so with this season's arrival in the sport of Vitaly Petrov. The Renault driver is Russia's first in Formula One.
The sport would also further raise the prestige of the formerly dilapidated Soviet-era resort, with officials keen to erode the irony from its moniker as the Russian Riviera by introducing a Monte Carlo-style chic. Monaco is home to F1's flagship race, the Monaco Grand Prix.
However, crumbling apartment blocks and monolithic hotels that housed entire labor workforces during Soviet summers are still eyesores to this day.
Capturing the world's third-most watched sport is a coup for Putin, who holds sports key to his country's re-emergence as a global power.
He almost single-handedly netted the Olympics for Sochi with a charm offensive on the IOC in 2007.
Putin also could be on the verge of landing the football World Cup in 2018, having personally lobbied inspectors during their summer visit to Russia and led a delegation to FIFA's headquarters in Zurich.
The host country will be announced on Dec. 2. England and the United States are among Russia's rivals to host the tournament.