Russian Prime Minister Vladimir Putin says Moscow is slashing the price Minsk has to pay for gas to less than half the average paid by other European states.
Speaking ahead of a meeting with visiting Belarus President Alyaksandr Lukashenka, Putin said in televised remarks that the price cut was "a substantial rebate. It will help to keep at least $2 billion in Belarus."
Putin said the price Belarus pays for Russian gas would drop from the $244 per thousand cubic meters this year to $164 at the start of 2012.
Under the plan, Minsk would start paying Russia's own domestic price by 2014.
The AFP news agency reports that in exchange, Russia will acquire the half of its neighbor's gas transport network that it does not own already and it will also win full control of the Yamal gas pipeline to Europe, which passes through Belarus.
Belarus is responsible for piping 20% of the Russian gas sold to Europe, with the rest going via Ukraine.
According to the BBC, Putin also said Russia would lend crisis-struck Belarus $10bn.
The loan will be used to pay for the construction of a nuclear power plant
The deal comes as Belarus is struggling with a massive current account deficit that has forced it to devalue its currency by some 65 percent and sell stakes in its economic assets to Russia and other states.
compiled from agency reports