The agreement signed during Putin's visit to Astana came amid reports that Kazakhstan was pressing Russia to pay more for using the Soviet-built space site. The new document does not specify financial details of the lease.
Under the previous agreement signed in 1994, Russia pays a yearly $115 million rent for Baikonur, which was inherited by Kazakhstan after the 1991 collapse of the Soviet Union. Kazakhstan has recently sought to raise the fee or get a share of profits from commercial launches at the sprawling facility buried deep in the Kazakh steppe. Russian officials have said Moscow would not pay more.
The new agreement envisages Kazakhstan's involvement in space exploration projects carried out at the launch facility.
"We think that Kazakhstan has not only Baikonur to offer, it has a good intellectual potential," Putin told reporters after talks with Nazarbayev.
The two countries also signed an agreement on Russian assistance in launching Kazakhstan's own communications satellite. Kazakhstan will foot the bill and Russia will provide the know-how and technical assistance.
Putin's visit comes as Russia steps up efforts to regain its weakening influence in Central Asia, a strategic energy-rich region, where in the past two years the United States has established a military presence.
Kazakhstan is interested in cooperation with Russia, which owns the main available oil pipeline routes linking the landlocked region with world markets. But Kazakhstan is anxious not to fall back into dependence on Moscow and has been actively looking for alternative ways to export its extensive energy resources.
"Northern oil export routes are for Russia and the southern ones are for Kazakhstan," Nazarbayev jokingly asked Putin during a joint news conference.
"Possibly," Putin replied.
Putin urged closer economic integration between the two countries, which share a 7,500-kilometer border.
"We can considerably expand trade and economic relations and within a short period of time we can at least double trade between ourselves," he said.
The trade turnover between Russia and Kazakhstan reached a record $5.5 billion last year, jumping 30 percent above the previous year. Last year, Kazakhstan exported 30 million tons of oil through Russia.
As part of Putin's visit, Russian oil giant LUKoil and Kazakhstan's national oil company, KazMunaiGaz, signed a $3 billion deal Friday to jointly prospect for oil at two sites in the Kazakh sector of the Caspian Sea. The sites have a total area of more than 9,000 square kilometers.
Also Friday, Putin formally opened a year of Russia in Kazakhstan, a program of cultural exchanges aimed at keeping up the strong ties between the nations.
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