Russia will spend a reported $51.8 billion in a drive to ensure its status as a leader in space exploration.
The news came 52 years to the day since Russian cosmonaut Yuri Gagarin made the first human flight into space.
The huge spending package includes funding to complete the construction of a new center to launch manned spacecraft.
"It's going to be a great launch pad. It took a long time to choose but now work is fully underway," said President Vladimir Putin on Friday from the unfinished Vostochny (Eastern) cosmodrome in Russia's far east, NPR reported.
Putin said the new cosmodrome would eliminate the frequently rough landings Russian cosmonauts endure when their spacecraft touchdown in the harsh terrain of Kazakhstan; the new station will allow for ocean landings like those done by U.S. astronauts.
"Most probably, according to specialists, they will come down on the ocean. So our cosmonauts will splash down rather than touch down," Putin said.
The first flight from the new launch center will take place in 2015.
Vladimir Popovkin, the head of Russia's space agency Roscosmos, said Moscow was targeting 2030 as the year in which it could begin creating a base on the moon for flights to Mars.
The moon is a great launch pad, it's basically a big space object on which a whole load of things could be accommodated. Not using it would be sinful," he told state television, according to AFP.