The entire Russian government resigned on Wednesday after President Vladimir Putin said a range of constitutional changes were needed.
Putin, in his annual address to Parliament, proposed a referendum on amending Russia's constitution to increase the powers of parliament - while maintaining a strong presidential system.
"I consider it necessary to conduct a vote by the country's citizens on an entire package of proposed amendments to the country's constitution," Putin said, without specifying any date for a vote.
Prime Minister Dmitry Medvedev, who tendered his resignation to Putin, will be appointed the new deputy head of Russia's influential Security Council.
"This is to show that Putin trusts Medvedev, who has been at his side for many years now," said Aleksandra Godfroid, a journalist in Moscow.
Putin's comments, at the Russian equivalent of the US State of the Union address, came as observers watched for clues as to how he might reform the political system before 2024 when his current presidential term ends and the constitution requires him to step down. He will be aged 71 at that time.
He called for a boost to the powers of parliament, making legislators responsible for choosing the prime minister and senior cabinet members.
In resigning, "Medvedev said that, in view of the significant changes that will take place, he feels the president should be given the opportunity to go through with these changes through with the type of government that he chooses," Godfroid told Al Jazeera.
The current government will have to continue its work until Putin hand-picks a new one to oversee the constitutional changes to Russia's systems and structures of power.
"The proposed changes to the constitution imply the government will actually be appointed by the Russian parliament, which is not how it is now, but at the same time, the president will retain the power to fire the government if he is not satisfied with their performance. The president will also keep control of the army, police and security, and will be appointing the heads of those services," said Godfroid.
"We will be able to build a strong prosperous Russia only on the basis of respect for public opinion," Putin told members of parliament on Wednesday.
"Together we will certainly change life for the better."
Putin steered away from any significant foreign policy announcements, sticking to domestic issues for the most part.
The role of governors would also be enhanced, he said, though Russia would maintain its presidential system.
"Russia must remain a strong presidential republic," Putin said.
He also said he wanted to tighten the criteria for anyone wanting to become president - anyone wishing to become president must have lived in Russia for the past 25 years, said Putin.
The latest constitutional changes could herald Putin's intention to shift into a new position to stay at the helm after his term expires.
"These changes do indicate a change in power structures, but at the same time, they do keep the president very strong," said Godfroid.
Russia last conducted a referendum in 1993 when it adopted the current constitution under Putin's predecessor, Boris Yeltsin.
SOURCE: Al Jazeera and news agencies