"The Federation Council ... of the Russian Federation ... taking into account multiple appeals by South Ossetia and Abkhazia on recognising their independence, including those received on August 22 and 24, 2008, proposes to recognise the independence of South Ossetia and Abkhazia," the draft resolution read.
De facto independence
Later the State Duma, the lower house, was expected to approve a similar measure.
The two regions are internationally recognised as part of Georgia, but they have enjoyed de facto independence since breaking from Tbilisi's control in the early 1990s.
Sergei Bagapsh, the separatist leader of Abkhazia told the Federation Council on Monday that "neither Abkhazia nor South Ossetia will ever again live in one state with Georgia".
While, Eduard Kokoity, his counterpart in South Ossetia, said Russia had saved his region from "genocide".
He said there was more political and legal legitimacy to recognising South Ossetian independence than there was for Kososo, the Serbian province which unilaterally declared independence with backing from the United States and European Union.
The Russian government has previously provided economic support to the separatist governments in the two regions and many Abkhazians and South Ossetians have Russian passports.
Mikheil Saakashvili, Georgia's president, on Monday accused Russia of attempting to "change Europe's borders by force".
"It will have disastrous consequences, including for Russia," he told France's Liberation newspaper in an interview given before the decision by Russia's upper house of parliament.
"It is a classic invasion which has nothing to do with international law."
Alexei Pankin, a Moscow-based political analyst, said that if Medvedev did recognise the independence of South Ossetia and Abkhazia it would put Russia on a "collision course" with the West.
"I think this is a rather impulsive reaction to Georgian aggression and to a universally hositile reaction, in the Western world at least, to what Ruussia perceives as its noble efforts to save the Ossetians from genocide," he said.
"I think our leaders have decided that we have no incentive to talk to the west, so lets just solve the problem the way the people who live there want it to be solved."
Medvedev has previously signalled his support for the regions' independence, saying earlier this month that he would "make the decision which unambiguously supports the will of these two Caucasus peoples".
Meanwhile, Nicolas Sarkozy, the French president, announced a special European Union summit to discuss the situation in the region.
The summit in Brussels will discuss the future of relations between the EU and Russia and aid to Georgia, Sarkozy's office said.
On Saturday, Sarkozy, who brokered a six-point ceasefore plan between the two sides, called on Russia to further withdraw its forces from roads linking Georgian cities.
Moscow is maintaining some troops in western Georgia as well as around South Ossetia.