Moscow said Saturday that it had withdrawn its troops from Lyman, a key town in eastern Ukraine that lies in one of the four Ukrainian regions Russia is in the process of annexing.
"In connection with the creation of a threat of encirclement, the allied troops were withdrawn from the settlement of Krasny Lyman to more favourable lines," Russia's Defense Ministry said in its daily briefing.
Videos circulating online earlier in the day showed Ukrainian forces on the outskirts of the town.
“Ukrainian Air Assault Forces are entering Lyman,” Ukraine’s Defense Ministry wrote in a Twitter post.
A key supply hub for Russian forces, the stronghold of Lyman has been the site of fierce fighting in recent weeks as Ukraine seeks to press forward with its counteroffensive.
While Ukrainian officials said Saturday that thousands of Russian troops were "encircled" in the town, which had a pre-war population of 20,000, it was unclear if Russian soldiers were actually trapped, or whether they had managed to escape.
The Russian decision to withdraw from Lyman led to immediate criticism from Kremlin allies.
Chechen leader Ramzan Kadyrov posted on messaging app Telegram that, if it was his decision, he would demote the commander in charge of the Lyman operation, "strip him of his medals and send him to the front with a rifle to wash away his humilation in blood."
Lyman is part of Ukraine's Donetsk region, which Russian President Vladimir Putin announced Friday would be one of four Ukrainian territories annexed to Russia.
The annexation is expected to be officially approved by Russia's parliament next week.
Following the recapture of Kharkiv region from Russia earlier this month, Ukrainian forces have been pressuring Lyman from the northwest via the small town of Drobysheve and from the southeast through the village of Dibrova.
Kadyrov also called on the Kremlin to consider using tactical nuclear missiles against Ukraine in the wake of the loss of Lyman.
"We need to take more serious steps, up to and including imposing martial law in border regions and using tactical nuclear weapons," he said.
Afp contributed reporting.