Daimler, the world's largest truck maker, will supply Kamaz with cleaner-burning engines, saving development costs for Kamaz as Moscow introduces stricter laws to clamp down on pollution.
Kamaz will procure more than 7,000 engines from its German ally and shareholder, as well as 15,000 front and rear axles for trucks and buses, the two firms said on Friday.
The deal will help secure jobs in Daimler Trucks' three German powertrain plants in Mannheim, Kassel and Gaggenau, where around 14,000 people in total are employed.
The financial terms of the deal were not disclosed.
"Kamaz will be able to offer its customers the products that would meet world quality standards and set new benchmarks for the Russian truck industry," said the Russian company's general director, Sergei Kogogin.
With Russia set to introduce tougher truck emissions standards equivalent to the older Euro IV in 2013, Daimler can help its partner by supplying Mercedes-Benz OM 457 diesel engines that already fulfill existing Euro V standards currently in place in Europe.
Daimler will also provide so-called "Enhanced Environmentally Friendly Vehicle" natural gas engines that emit even fewer pollutants like nitrogen oxides.
The German automotive group will supply axles to Kamaz in an intermediate step before the two begin manufacturing axles in Russia through a planned joint venture.
Daimler, which owns 11 percent directly in Kamaz, has steadily been expanding its partnership with the Russian truck maker ever since it was established in 2008.