Russian President Vladimir Putin has formally put forward Mikhail Mishustin, the head of Russia's Federal Tax Service, to be Russia's new prime minister. 

Putin proposed the candidacy for approval to the Russian parliament after Mishustin agreed to become a candidate, the Kremlin announced on Wednesday.

Earlier in the day, Russian Prime Minister Dmitry Medvedev announced that his government was resigning to give the Russian leader room to carry out changes he wants to make to the constitution. 

The resignation came shortly after President Putin delivered his annual state-of-the-nation address, where he proposed a series of constitutional reforms that would strengthen the role of parliament and increase the powers of the prime minister and Cabinet members. 

Medvedev said Putin's proposals would make significant changes to the country's balance of power and so "the government in its current form has resigned."

"We should provide the president of our country with the possibility to take all the necessary measures" to carry out the changes, he said. "All further decisions will be taken by the president." 

Medvedev made the announcement on state TV sitting next to Putin, who thanked Medvedev, a close ally, for his work.

"I want to thank you for everything that has been done, to express satisfaction with the results that have been achieved," Putin said. "Not everything worked out, but everything never works out."

Accepting the resignation, Putin asked Medvedev to continue as head of government and asked his cabinet to keep working until a new government has been appointed. 

He also said Medvedev would take on a new job as the deputy head of Russia's Security Council, which Putin chairs. 

Medvedev, a longtime close associate of Putin's, has served as Russia's prime minister since 2012. He spent the four years before that, 2008 to 2012,  as president.

Before announcing the resignation of the cabinet, Medvedev met with Putin to discuss his state-of-the-nation address, which took place earlier on Wednesday, the Kremlin's press office said.  

Earlier Wednesday, Putin in his annual State of the Nation address to the Federal Assembly, proposed a national referendum on amendments to the country's constitution to increase the powers of the parliament, making lawmakers responsible for choosing the prime minister and senior cabinet members, instead of the president as in the current 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. "This will increase the role and significance of the country's parliament." 

"We will be able to build a strong, prosperous Russia only on the basis of respect for public opinion," he said. "Together, we will certainly change life for the better." 

A president will not have the power to reject the proposed candidacies, Putin said, but will be able to later remove the prime minister and senior cabinet members. 

"Russia must remain a strong presidential republic," Putin said. The role of governors would also be enhanced, he added. 

In power as either president or prime minister since 1999, Putin, 67, is due to step down in 2024 when his fourth presidential term ends.

He suggested that a clause limiting the president to two successive terms could be changed, but did not specify how.  In December, Putin indicated he was in favor of removing the word "successive" from the clause. 

Russia last conducted a referendum in 1993 when it adopted the constitution under Putin's predecessor Boris Yeltsin.