"The Russian side has made the decision to extend to Venezuela a $1 billion loan for a military cooperation program," the source said ahead of a meeting between Russian President Dmitry Medvedev and his Venezuelan counterpart, Hugo Chavez, who starts a two-day visit to Russia on Thursday.
Between 2005 and 2007 Russia signed 12 contracts worth more than $4.4 billion to supply arms including fighter jets, helicopters and Kalashnikov assault rifles to Venezuela.
Medvedev will meet with Chavez on Friday in the southern Urals city of Orenburg, the Kremlin said. This will be the presidents' second meeting after their talks in July in Moscow.
Chavez's visit to Russia comes as a Russian naval task force sails to Venezuela for joint exercises, and after two Russian strategic bombers returned from the country last week following a patrol mission along the South American coast.
The show of force by Russia, unprecedented since the Cold War, was condemned by the U.S. administration, with Secretary of State Condoleezza Rice calling it "a dangerous game."
Chavez said earlier Thursday that he and Medvedev would observe a military exercise in the Urals.
Chavez travels to Russia after visiting China, where he sought to boost oil supplies and secure arms deals.
A vocal critic of the United States, Chavez has sought to cultivate allies among countries also unhappy with Washington's foreign policy.
Russia's relations with the United States plunged to a new low after its armed conflict last month with Georgia, which has strong U.S. backing.