Putin stunned observers on Monday by appointing former tax chief and current European Union representative Mikhail Fradkov, 53, as prime minister.
His nomination is expected to be approved by the pro-Kremlin parliament within days.
Analysts said the decision still left the field open for who might succeed Putin after his second term runs out in 2008. His re-election is assured on 14 March and the prime minister's post was seen as the launching pad for the presidential successor.
But Putin admitted he faced "a difficult task" in naming a replacement for the deposed Mikhail Kasyanov - the last link to the government of former president Boris Yeltsin - and analysts said Fradkov was likely to be a stand-in prime minister.
"We faced a difficult task - to present a new government," Putin said during a televised meeting with his supporters from the State Duma lower house of parliament.
"This had to be a person of very high qualification, one who is decent, who has solid experience in various government structures," Putin said.
"The man is Fradkov, Mikhail Yefimovich, a minister who represents Russia at the European Union," Putin said.
Sacking the government
Putin fired his government on 24 February in an unexpected move that analysts saw as an election ploy to boost voter turnout during the presidential vote that has seen little public interest so far.
"We faced a difficult task - to present a new government. This had to be a person of very high qualification, one who is decent, who has solid experience in various government structures. The man is Fradkov, Mikhail Yefimovich, a minister who represents Russia at the European Union."
"No one could have predicted such a strange move from the president," said independent political analyst Andrei Piontkovsky.
"As odd as it may seem, Fradkov is associated closely with the people who served in the Yeltsin era, so this is a very strange move by Putin," Piontkovsky said.
"This is not Putin's man - this is not going to last long." Television newscasters also appeared flabbergasted by the news. NTV television broke the news in its noon broadcast as a puzzled anchor said only "Fradkov has been named."
The newscaster appeared stunned and said only: "This is all that we know at this time."
The Yeltsin link
The deposed prime minister Kasyanov was a holdover from the era of Yeltsin and was seen to represent the big business interests from that time that he supported.
The deposed PM was a holdover
from the era of Boris Yeltsin
Putin has fought tirelessly with that era's business barons and the government was expected to fall - but only after the election. That business bloc was fought bitterly by the so-called "siloviki" - Kremlin insiders from the secret service and police agencies in which Putin himself once served.
Putin said his decision to appoint Fradkov was based in part because he was linked closely to that secretive camp. Fradkov "knows the security structures since he was the deputy secretary of the Security Council and headed the tax police," Interfax quoted Putin as saying.
"That is why he has great experience in the fight against