The decision appears to give Depardieu -- a frequent guest of the Moscow celebrity circuit who nonetheless never asked for a Russian passport -- the right to pay the 13 percent tax levied in Russia on everyone from billionaires to the poor.
"Vladimir Putin has signed a decree granting Russian citizenship to France's Gerard Depardieu," the Kremlin said in a brief statement describing the seemingly unprecedented decision.
The decree cited an article of the 1993 constitution extending presidents the right to issue citizenship or to grant political asylum.
But the announcement looked more like a jab at the West by Putin -- keen to show off Russia's more business-friendly approach to taxes -- than an actual effort to lure one of the world's biggest celebrities to Moscow.
Depardieu said on Sunday that a decision by France's highest court to strike down the proposed rate on millionaires changed nothing in his highly publicised and much debated decision to move out of France.
The French government has vowed to push ahead with the tax -- applicable to anyone who makes more than one million euros ($1.3 million) a year -- and propose a new measure that would conform with the constitution.
Putin at his end-of-year press conference in December said he was ready to offer the 64-year-old cinema veteran a Russian passport to resolve the row.
His comments initially generated snickers from reporters, but the Russian strongman quickly made clear that he was entirely serious.
"If Gerard really wants to have a residency permit in Russia or a Russian passport, we can consider this issue resolved positively," Putin said at the time.
The 60-year-old Russian leader referred to Depardieu both as a successful businessman and a friend who loved his country and would therefore be unlikely to leave France for good.
Yet Putin also added that the French prime minister's famous remark about Depardieu being "pathetic" for threatening to leave the country had hurt the star's feelings and may eventually force him to move.
"An artist is easy to offend," Putin remarked.
Depardieu had mentioned moving to Belgium -- home of a 50-percent millionaires' tax -- and has purchased a new home near the French border for the specific purpose of avoiding the higher rate.
-- Welcome in Chechnya ---
The hulking actor has been a huge star in Russia since the Soviet era and still retains cult status among many movie buffs.
France was seen by the USSR as one of Europe's friendlier countries with natural socialist tendencies -- a status that made its movies a staple of Soviet silver screens.
Depardieu has since grown into a frequent jury member of the glitzy Moscow and Sochi film festivals whose final word on a movie is often treated as gospel.
His straw hair and rugged features have even featured in local television advertisements ranging from kitchen furniture from the central city of Saratov to a brand of ketchup called Baltimore.
Depardieu has even been the public face of a small Russian bank called Sovetsky (The Soviet).
The charismatic Frenchman was most recently granted the honour of being personally asked to emigrate to Russia by the iron-fisted leader of Chechnya -- scene of two post-Soviet wars that killed tens of thousands.
"I do not plan to discuss his actions, but I can say for sure that we are ready to welcome the great artist," Chechen leader Ramzan Kadyrov said a day before Putin's first remarks on the subject.
A Chechen spokesman said on Thursday that Kadyrov's invitation was still good.
"We confirm: if Depardieu wants to live in the Chechen Republic, this will be received as joyful news," spokesman Alvi Karimov told Moscow Echo radio.
"He will receive all the conditions required for a good life and creative work," the Chechen spokesman said.
Depardieu this year made a peculiar visit to Chechnya to attend the birthday of Kadyrov -- a ruler accused of torture and other violent crimes by international rights groups.
A video of that celebration showed Depardieu at one stage shouting in Russian: "Glory to Grozny! Glory to Chechnya! Glory to Kadyrov!"
The PublicPost.ru website remarked after the incident that Depardieu seems to enjoy "a warm friendship with both Putin and Kadyrov."
