Defense Minister Anatoly Serdyukov Sunday said the process had already begun with changes at the staff level.
The Kremlin is also whittling the size of the military down to about 1 million troops, including career personnel and conscripts, RIA Novosti reported.
The second phase will involve social issues in the military. The third will focus on military equipment.
"Armament supplies are quite a long process," Serdyukov said. "We have divided it into two parts. At the first stage, which will last until 2015, modern armaments in our army must comprise no less than 30 percent while this figure must increase to 70 percent by 2020."