President Boris Yeltsin signed a landmark decree Wednesday allowing the free purchase and sale of land, removing one of the last legacies of Communist rule.
The move is a major boost to Yeltsin's plans for a free market economy and will accelerate the breakup of the country's vast network of collective farms.Presidential spokesman Anatoly Krasikov told The Associated Press the decree removed the "last obstacles" to forming a real free market.
Russia's hard-line parliament, which was disbanded by Yeltsin, had resisted removing state controls over the use of land and had imposed limits on earlier efforts to privatize it.
"The state guarantees the inviolability and protection of private property on land as well as protection of property rights in all business transactions concerning land," the decree said.
The presidential order also guarantees citizens that the government could not confiscate their land without "compensation of its value to the owner on its market price."
The confiscation of land was one of the Bolsheviks' first acts when they seized power in 1917. Dictator Josef Stalin forced the Soviet Union's peasants on to collective farms in the 1930s, resulting in famine and the deaths of millions.
Returning land to private hands is likely to have a major psychological impact on Russians, who until now have only been able to own small plots they used primarily for country homes and vegetable gardens.