The surprise decision, which also sees the state-owned Voice of Russia radio station closed down,  was revealed today by Russian President Vladimir Putin in a decree on the official Kremlin website.

The decision to restructure the news agency has been taken in order to make it more economical while increasing its reach, Russian Government officials in Moscow claimed.

But RIA Novosti's own website claimed "the move is the latest in a series of shifts in Russia's news landscape, which appear to point toward a tightening of state control in the already heavily regulated media sector."

The agency had been set up in 1941, two days after Nazi Germany invaded the Soviet Union, as the Soviet Information Bureau, and now has reporters in over 45 countries providing news in 14 languages.

Its coverage is generally considered to be more fair and balanced than any other media outlet in Russia.

Vladimir Putin's decision to close RIA Novosti raises fears over media censorship in Russia ©Getty Images

It was announced at a Moscow press conference headed by Kevan Gosper, chairman of the International Olympic Committee's (IOC) Media Commission, in September 2011 that RIA Novosti had been appointed as the national news agency and national Olympic photo pool for Sochi 2014.

RIA Novosti was due to provide national news, sport and pictorial coverage of the Sochi Olympics, focusing primarily on Russian athletes.

It was appointed to a similar role for the Paralympics in April this year.

The new agency will be called Rossiya Segodnya, which in English translates as Russia Today, but will be separate from Kremlin-funded English-language television channel RT, originally known as Russia Today.

The decision to appoint Kremlin supporter Kiselev as head of the new organisation is a highly controversial one as last year he was accused of making a series of Inflammatory remarks about gay people.

These included claiming they "should be banned from donating blood, sperm," and that "their hearts, in case of an automobile accident, should be buried in the ground or burned as unsuitable for the continuation of life."

His appointment will do little to allay international fears that gay competitors, officials and spectators will be targeted during Sochi 2014.

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