Dmitry Medvedev told members of the ruling United Russia party in Siberia the government will spend $437.4 million to close the Baikal Pulp and Paper Mill, the official Russian news agency RIA Novosti reported Wednesday.
Opened in 1966, the Baikal mill has long been a target of environmentalists who charge it is doing untold damage to Lake Baikal, a UNESCO World Heritage Site that holds 20 percent of the planet's unfrozen fresh surface water.
The mill is the main employer for the nearby town of Biakalsk.
Its largest creditor, the state-run development bank Vnesheconombank, is trying to sort out major problems related to large debts, waste disposal and re-employment of a workforce of 2,000.
Engineers said halting production would take at least two years while liquidation of the mill's accumulated waste would take from four to six years.