Russian President Vladimir Putin has signed a wide-ranging treaty with the Georgian breakaway region of South Ossetia, which critics say paves the way for Moscow to annex the territory.

The "Treaty on Alliance and Integration" determines the long-term relations between Russia and South Ossetia, Putin said after signing the document in the Kremlin with Leonid Tibilov, the region's president.

Putin added that South Ossetia will receive 9 billion roubles ($A191 million) in Russian aid over three years, in addition to 43 billion roubles given over the past 6 years.

The United States immediately announced it does not recognise the legitimacy of the treaty.