"I want you to know that the country's leadership understands very well that space research is one of the most important fields," Putin said.
The nation's space program, which was a source of pride and received generous state funding during the Soviet times, has fallen on hard times after the 1991 collapse of the Soviet Union.
Putin thanked space officials for preserving the industry's prestige despite the severe shortage of funds over the past decade and emphasized the importance of space for national security.
"Space activities are so important for the country not only because they solve environmental or agricultural tasks, but because they are essential for the very existence of our nation," he said.
Putin's statement follows February's test of what was described a pioneering new weapon that could elude missile defense systems such as the one being developed by the United States.
Putin and other Russian officials said after the test that the development of new weapons wasn't aimed against the United States, but most observers viewed the move as Moscow's retaliation to the U.S. missile defense program.
"For many years, space has been part of military-political rivalry," Putin said Monday. "Now we must do everything to demilitarize space and turn it into the arena of peaceful cooperation."
But he added that despite Russia's push for peaceful use of space, it still is and will likely remain an arena of the arms race.
"We will be striving to prevent space from being an arena of military-political confrontation, but we all understand very well that this situation still exists now and will continue to exist for quite a long time,'' Putin said. ``We are taking it into account and will continue to take that into consideration in the future."
Putin didn't refer to any specific country or program.
After years of fervent protests, Russia reacted calmly when Washington withdrew from the Anti-Ballistic Missile Treaty in 2002 in order to deploy a nationwide missile shield.
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