Moskva, the flagship of Russia’s Black Sea Fleet, was being towed to port when “stormy seas” caused it to sink, according to a ministry message.
The 510-crew missile cruiser was a symbol of Russia’s military power, leading its naval assault on Ukraine.
Kyiv says its missiles hit the warship. Moscow has not reported any attack – it says the vessel sank after a fire.
The blaze caused the explosion of the warship’s ammunition, Russia says, adding that the entire crew were later evacuated to nearby Russian vessels in the Black Sea.
After saying initially the warship was afloat, late on Thursday the Russian defence ministry announced that the Moskva had been lost.
The 12,490-tonne vessel is the biggest Russian warship to be sunk in action since World War Two.
“While being towed… towards the destined port, the vessel lost its balance due to damage sustained in the hull as fire broke out after ammunition exploded. Given the choppy seas, the vessel sank,” the Russian defence ministry said.
Ukrainian military officials said they struck the Moskva with Ukrainian-made Neptune missiles – a weapon designed after Russia’s annexation of Crimea in 2014, and the naval threat to Ukraine in the Black Sea grew.
The ship’s sinking was described by the US as a “big blow”, but American officials were unable to confirm whether Ukrainian Neptune missiles were responsible.
“It’s certainly plausible and possible that [Ukraine] did in fact hit this with a Neptune missile or maybe more,” Pentagon spokesman John Kirby said to CNN.
A senior Ukrainian official said as many as 510 crew could have been on board the Moskva.
On the first day of Russia’s invasion of Ukraine on 24 February, the Moskva gained notoriety after calling on a small garrison of Ukrainian border troops defending Snake Island in the Black Sea to surrender – to which they memorably radioed an expletive-laden message of refusal.
Originally built in the Soviet-era, the Moskva entered service in the early 1980s. The vessel was actually laid down in Ukraine’s southern city of Mykolaiv, which has been heavily bombed by Russia in recent days.
The guided missile cruiser was previously deployed by Moscow in the Syria conflict where it supplied Russian forces in the country with naval protection.
It reportedly had 16 Vulkan anti-ship missiles and an array of anti-submarine and mine-torpedo weapons.
Intelligence expert Justin Crump told BBC Radio 4’s Today that the Moskva’s main role had been providing air defence support to other ships in Russia’s Black Sea fleet.
“It’s main advantage was very long range anti-air weapon systems, very long range anti-surface ship weapon systems. It wasn’t conducting strikes ashore,” Mr Crump told BBC Radio 4’s Today.
Admiral Lord West, former First Sea Lord and Chief of the Naval Staff, said that as well as being a military blow the vessel’s loss was “very embarrassing”.
“This has a huge impact,” Lord West said, speaking to BBC Radio 4’s PM before confirmation that the Moskva had sunk.
“Putin loves the navy. When he came into power, the first bit of the old Soviet forces that he put effort into was the navy. He’s always had a soft spot for it.”
It is the second major vessel Russia has lost since the start of its invasion. In March, the Saratov landing ship was destroyed by a Ukrainian attack in the harbour of Berdyansk, a Sea of Azov Ukrainian port seized by Russia.
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