Russia will return three captured naval ships to Ukraine on Monday and is moving them to a handover location agreed with Kyiv, Crimea's border guard service was cited as saying by Russian news agencies on Sunday.
A Reuters reporter in Crimea, which Russian annexed from Ukraine in 2014, earlier on Sunday saw coastguard boats pulling the three vessels through the Kerch Strait towards the Black Sea where they could potentially be handed over to Ukraine.
Ukraine has been pushing for their return as a goodwill gesture from Moscow ahead of a possible four-way peace summit on eastern Ukraine next month.
"In accordance with agreements reached with Ukraine three Ukrainian ships ... are being towed to a location agreed with the Ukrainian side for their handover, which will take place on Nov. 18," Crimea's border service said on Sunday, according to Russian news agencies.
Crimea's border service was not immediately available for comment on Sunday.
Russia seized the ships off the coast of Crimea in November last year after opening fire on them and wounding several sailors. Moscow said the ships - two small Ukrainian armoured artillery vessels and a tug boat - had illegally entered its territorial waters. Kiev denied that.
Russia returned the sailors who had been on board the ships to Ukraine in September as part of a prisoner exchange deal.
Russia's Kommersant newspaper reported on Saturday that Moscow had decided to return the ships to Ukraine and that they would be towed into the Black Sea and handed over to Ukraine.
Various Russian media outlets have reported that the ships will be returned to Ukraine without their ammunition and documentation.
The move, if it happens, will be seen as a confidence-building measure ahead of the planned Ukraine summit.
The leaders of France, Germany, Russia and Ukraine will meet in Paris on Dec. 9 in an attempt to advance efforts for a peaceful resolution to the conflict in eastern Ukraine, the French presidency said on Friday.
A Kremlin aide was less equivocal on Sunday, saying such a summit was possible this year but that no date had yet been agreed.
More than 13,000 people have been killed in the more than five-year-old conflict in east Ukraine between pro-Russian separatists and Ukrainian government forces.
Relations between Ukraine and Russia collapsed following Moscow's annexation of the Crimean peninsula, which prompted Western sanctions. Ukrainian President Volodymyr Zelenskiy won a landslide election victory in April promising to end the conflict.
For some analysis on how signifiant the move is, our correspondent Galina Polonskaya in Moscow has been monitoring events for us. Click on the video above for more.