In a surprise decree published on the Kremlin's website on Monday, Mr Putin announced it would be replaced by a news agency called Russia Today.
The new agency will be headed by journalist and keen Kremlin supporter Dmitry Kiselev.
The state-owned Voice of Russia radio station has also been closed. The decree was effective immediately.
Sergey Ivanov, the head of the Kremlin administration, has told journalists in Moscow that the news agency is being restructured in order to make it more economical while increasing its reach, Interfax reports.
"Russia pursues an independent policy and robustly defends its national interests. It's not easy to explain that to the world, but we can and must do this," he said.
For many Kremlin critics in Russia, that phrase suggests this is a sinister move by President Putin, says the BBC's Daniel Sandford in Moscow.
In the post immediately below, I suggested that Putin longed to rebuild the Russian Federation to its former prominence in the world. It appears he believes that it must also return to the propaganda methods of the former paranoid communist state. Apparently, balanced reporting does not work for Russia, or at least Mr Putin.
In the old days, a communist president of Russia would establish his authority by murdering his political rivals. These days it's done by taking control of the media, which may or may not include murder.
|Daniel Sandford, BBC Moscow|
Mr Kiselev is known for his ultra-conservative views, including recently saying that gay people should be banned from giving blood, and that their hearts should be burnt rather than used in transplants.
Of all the state-owned media organisations, RIA Novosti has made the greatest attempt to produce balanced coverage in recent years. This was in part because of its international clients in media organisations around the world. It would have lost credibility otherwise.
But now the agency is being taken over by the Russia Today brand, which for opposition-minded Russians is more of a government mouthpiece, giving carefully selected news with a clear pro-Kremlin bias.
The word "propaganda" - never far from the Kremlin's opponents' lips when they are discussing state-controlled Russian television news - is now also being used to describe the new news agency.
Reporting on its own demise, RIA noted in its news report that "the move is the latest in a series of shifts in Russia's news landscape, which appear to point toward a tightening of state control in the already heavily regulated media sector".
Russia Today is the parent of RT.com which I have quoted a few times on this blog. Their pro-Kremlin bias was obvious yesterday in a piece blaming the west for inciting the riots in the Ukraine, but taking no responsibility for any actions by Russia.