Russian President Vladimir Putin on Friday unexpectedly dismissed his close ally and powerful chief of staff Sergei Ivanov, the Kremlin said in a statement.

Russian President Vladimir Putin on Friday unexpectedly dismissed his close ally and powerful chief of staff Sergei Ivanov, the Kremlin said in a statement.

"Russian President Vladimir Putin has decreed to relieve Ivanov of his duties as head of the Russian presidential administration," the statement said, adding that Ivanov would now serve as a special representative for conservation, environmental and transportation issues.

The move represents the highest-level demotion inside the Kremlin in several years.

Ivanov, who served together with Putin in the Soviet-era KGB spy agency, was appointed Kremlin chief of staff in late 2011, months ahead of Putin's 2012 re-election.

The former defense minister, 63, will be replaced by Anton Vaino, a 44-year-old ex-diplomat who had served as Ivanov's deputy since 2012.

"I remember well our agreement about the fact you had asked not to be in this area of work as the head of the presidential administration for more than four years," Putin said in a meeting with Ivanov and Vaino broadcast on state television.

"This is why I am sympathetic to your desire to move on to another field of work."