Ecclestone in Russia

"We have reached an agreement with the principal owner of Formula One," Putin said in a speech to Russian business leaders.

Formula One supremo Bernie Ecclestone has signed the seven-year deal, worth reportedly more than £125 million, with the regional governor Alexander Tkachev.

The Black Sea resort is hosting the Winter Games in 2014 and the opening race could be put back a year if necessary, Deputy Prime Minister Dmitry Kozak noted.

Russian officials said the plan called for the race track to be built near the Olympic park that would host most of the Games events in February 2014.

Russia is the latest confirmed addition to an already expanded calendar, with a record 20 races scheduled for next year. India is making its debut in 2011 after South Korea's inaugural race next week.

A return to the United States, with a grand prix in Austin, Texas, is scheduled for 2012.

Ecclestone has said 20 races is probably the limit for the glamour sport, meaning that some races in the European heartland could be dropped, although he has also joked about adding more.

"We are not dropping anything. (It's) 20 races -- getting ready for 25," he said back in April, long before the 2011 calendar was published.

In July, Ecclestone said Formula One needed to be in Russia more than any other candidate for a race. The Briton has wanted a grand prix in Russia for many years, even persuading former Soviet leader Leonid Brezhnev to agree to the project following the 1980 Moscow Olympics - but it never materialised.

"I know that you had even met Brezhnev, trying to negotiate a deal to have a race in Russia way back then," Putin told Ecclestone. "Finally, after decades of negotiations, we have come to an agreement to make it a reality."

Moscow has always been a preferred option and in March 2002 the deal was nearly done with then mayor Yuri Luzhkov to stage a race by 2004, but negotiations collapsed when the two sides could not agree on a seven-year television contract, valued at around £150m.

Sochi, backed by Putin, became the frontrunner to host the event.

"It (Formula One) fits perfectly with the Winter Olympics as it could use all the hotels and other infrastructure that would be build here by 2014," Putin said, ruling out building a second race track in Moscow.

"It's highly unlikely that we would construct two Formula One race tracks. We need to deal with this one first," he added.

Russia has its first Formula One driver in Renault's Vitaly Petrov, although the rookie's place at the team in 2011 has yet to be confirmed due to his inconsistent performances.

Petrov has, however, attracted several Russian sponsors to his team including part Renault-owned carmaker Lada.