Russian prime minister and the entire government resign over President Putin's plan to remain in power indefinitely.

Dmitry Medvedev, the prime minister of Russia and the entire Russian government have resigned after President Vladimir Putin proposed a constitutional reform that would allow him remain in power indefinitely.

Speaking in his annual address to parliament on Wednesday, Putin proposed a referendum on amending Russia's constitution to increase the powers of parliament while maintaining a strong presidential system.

"I consider it necessary to conduct a vote by the country's citizens on an entire package of proposed amendments to the country's constitution," Putin said.

He also suggested an amendment of the constitution to allow lawmakers to name prime ministers and cabinet members.

"It will increase the role of parliament and parliamentary parties, powers and independence of the prime minister and all cabinet members," Putin said.

"We will be able to build a strong prosperous Russia only on the basis of respect for public opinion.

"Together we will certainly change life for the better. Russia must remain a strong presidential republic."

After President Putin made his plans known, his entire government including the country's Prime Minister Dmitry Medvedev tendered their resignation to him.

Hours after the government resigned, Putin named federal tax chief Mikhail Mishustin, 53 years old and a relatively unknown technocrat, as the new prime minister.

According to RIA news agency, Mishustin will face a vote of approval in the lower house of parliament on Thursday.