Russian President Vladimir Putin meets with Prime Minister Dmitry Medvedev in Moscow on Wednesday – AFP

Russia’s government resigned in a shock announcement on Wednesday after President Vladimir Putin proposed a shake-up of the constitution.

The announcement by Putin’s longtime ally Dmitry Medvedev came after the president used his annual state of the nation address to call for a nationwide vote on a package of constitutional reforms.

Mr Putin has been at the helm since 2000, and he is constitutionally barred from seeking re-election in 2024.

The Russian leader is widely believed to be planning to hold on to power, and speculation has been rife that he was looking to amend the Russian constitution to stay in another capacity, possibly as a prime minister or as chairman of parliament or of the State Council, an important advisory body.

The changes Putin proposed on Wednesday would transfer more authority to parliament, including the power to choose the prime minister and senior cabinet members, instead of the president as under the current system.

Other changes would see the role of regional governors enhanced and residency requirements tightened for presidential candidates.

Several hours later, Russian state TV televised a meeting of the Russian government, attended by Mr Putin, when Prime Minister Medvedev said that the entire cabinet was stepping down.

“The resignation of the government is necessary to let the president of our country to make all the necessary decisions” to see through the proposed amendments, Mr Medvedev, who has served as prime minister for eight years, said.

The decision apparently came as a surprise even for some cabinet ministers. Most of them looked sobre if not shocked as they listened to Mr Medvedev’s announcement compared to the light mood that many were in when they talked to reporters after Mr Putin’s address.

The respected news website The Bell later quoted two unnamed ministers saying that no one in the cabinet knew about the impending resignation.

“It’s all very unclear and unexpected,” Moscow-based political analyst Masha Lipman told The Telegraph. “It’s definitely part of the (succession) plan but we don’t know right now what this plan is.”

Tatyana Stanovaya, nonresident scholar at the Moscow Carnegie Centre and head of the R.Politik political analysis firm, wrote on Wednesday evening that the resignation of the government likely aims for Mr Putin to groom a new successor, whoever that might be:

“It looks very much like Putin is preparing to leave the presidency … and is currently trying to create a safety mechanism for his successor in case of conflict.”

Mr Medvedev and his government have been tainted by allegations of large-scale corruption, and Medvedev’s unpopularity was reportedly dragging down Mr Putin’s approval ratings.

Mr Medvedev has been Mr Putin’s loyal ally since he willingly assumed Russian presidency in 2008 and then put aside his own political ambitions and supported Mr Putin’s decision to run again in 2012.

On Wednesday MrPutin offered Mr Medvedev to work as his deputy at Russia’s Security Council, an important advisory body. It was not unclear, however, if Mr Putin had any other senior positions for the outgoing prime minister in mind.

Kremlin spokesman Dmitry Peskov told the state-owned news agency Tass on Wednesday that the amendments will not be coming up at a referendum but some kind of vote that he would not immediately specify.