The Russian Federal Agency for Special Construction will build two military posts in the disputed Kuril Islands, the agency's chief said on Friday.
"We are currently designing two military posts in the islands of Iturup and Kunashir, our task is to complete the project's design in 2012 and begin construction in 2013," Grigory Naginsky said.
Construction costs are estimated at 12 million rubles (about $377 million).
Naginsky also said an airfield for civilian and military aircraft in the disputed islands is currently being refurbished.
The row over the Kuril Islands, which are known as the Northern Territories in Japan, has prevented the two countries from signing a formal peace treaty following the end of World War II.