Russian President Vladimir Putin is proposing restructuring the $3 billion debt owed by Ukraine to his country.

The surprise announcement by Putin at the summit of G-20 leaders in Turkey on Monday could be a significant step toward promoting stability in Ukraine as fighting between government forces and Russia-backed separatists in eastern Ukraine dies down.

Putin said that he had discussed the proposal with President Barack Obama earlier in the day.

Putin said that rather than seeking $3 billion in debt repayment this year, Russia would be willing to agree to payments of $1 billion a year in 2016-18.

He said: "We are ready not to receive any money this year." He said Russia has asked for guarantees for the repayment from either the United States or the European Union.