Russia's government has unexpectedly resigned after President Vladimir Putin proposed sweeping constitutional changes that could allow him to extend his rule.

Prime Minister Dmitry Medvedev said he was stepping down to give Mr Putin room to carry out the changes, which, if implemented, would shift power to parliament and the prime minister.

They may also allow Mr Putin, 67, to continue to rule in another capacity after his current term ends in 2024.

Mr Medvedev, a long-time Putin ally and former president, announced his resignation on state TV sitting next to Mr Putin, who thanked him for his work.

The president said Mr Medvedev would take on a new job as deputy head of Russia's Security Council, which Mr Putin chairs.

Attention now turns to who becomes the next prime minister.

Possible candidates includes Moscow Mayor Sergei Sobyanin, who is credited with breathing new life into the capital.

Today's changes will be seen by many as the start of Mr Putin's preparations for his own political future when he leaves the presidency in 2024.

Whoever he picks as prime minister will inevitably be viewed as a possible presidential successor.

In 2008, Mr Putin stepped down from the presidency to become prime minister under Mr Medvedev, who then stepped aside four years later to allow Mr Putin to resume the presidency.

In power in one of the two roles since 1999, Mr Putin is due to step down in 2024, when his fourth presidential term ends.

He has not yet said what he plans to do when his term expires but, under the current constitution, which sets a maximum of two successive terms, Mr Putin is barred from immediately running again.

Russian President Vladimir Putin

Mr Putin told Russia's political elite in his annual state-of-the-nation speech that he favoured changing the constitution to hand the State Duma, the lower house of parliament, the power to choose the prime minister and other key positions.

"These are very serious changes to the political system," Mr Putin said.

"It would increase the role and significance of the country's parliament ... of parliamentary parties, and the independence and responsibility of the prime minister."

Critics have long accused him of plotting to stay on in some capacity to wield power over the world's largest nation after he steps down.

He remains popular with many Russians who see him as a welcome source of stability even as others complain that he has been in power for too long.