MOSCOW (AFP) - Moscow on Monday formally launched a project to build a bridge to Ukraine's Crimea, as armed men believed to be Russian took the Black Sea peninsula under almost complete control.

The decree signed by Prime Minister Dmitry Medvedev names Russia's state company Avtodor as the main contractor for the project and for engineering studies to be completed by November 2014.

"We are watching the way the situation develops, but there are decisions that have binding character," Mr Medvedev said of the bridge, which was agreed between Russia and the former Ukrainian government of now ousted president Viktor Yanukovych.

President Vladimir Putin at the weekend received a green light from parliament to use armed forces in Ukraine due to a "threat to the lives of Russian citizens" on its Crimean peninsula.

The Black Sea peninsula is under de-facto occupation by Russian military which has been embraced by the local Russian speaking population fearing Kiev's new authorities.

A bridge between the Crimean town of Kerch and the long Chushka spit on the Taman peninsula in Russia's Krasnodar region has been envisioned for decades since the Soviet era.

The German army began to construct a link in 1943, when the Crimea was under Nazi occupation.

Soviet authorities later finished the bridge, but it was destroyed by shifting ice even before the end of World War II.

Currently there is a car and pedestrian ferry across the 4.5 kilometre wide Kerch strait, known for long lines and poor service.

In the 1990s, a new bridge was lobbied for by ex-mayor of Moscow Yury Luzhkov, which reports estimating the cost at about US$1 billion (S$1.27 billion) at the time.

The government of Mr Yanukovych signed an agreement with Russia in December to build the link for passenger, cargo, and energy transport.