Russian President Dmitry Medvedev signed 15 agreements with his Cyprian counterpart - covering tax, trade, energy and other areas - during a visit on Thursday, the first to the ethnically divided island by a Russian head of state, DPA reported.
Medvedev's visit comes amid an increase of Russian investment and tourism to the island. Among the deals signed between Medvedev and Cypriot President Dimitris Christofias is an agreement to abolish double taxation on capital and income tax.
The other agreements signed in a bid to boost bilateral ties were in the areas of investment, energy, trade, tourism, culture and health, along with a cooperation agreement for the Cyprus Stock Exchange and Russia's RTS Bourse.
Both leaders said they would also work more closely in the future to combat money laundering.
"Bilateral ties between Russia and Cyprus are going through their best period in all areas and serve as a model of interstate relations," Christofias said.
The eastern Mediterranean island is a popular destination for Russian tourists, and Russian investment in Cyprus reached 16 billion euros (22 billion dollars) last year - mainly in the banking, energy and property sectors.
Russians have also invested heavily in the island's real estate sector, with more than 40 per cent of property buyers being Russian - matching the Cypriot rate. The remaining 20 per cent of property buyers are British.
The visit by the Russian leader comes amid intensified United Nations efforts to find a lasting solution for the reunification of the divided island between the internationally recognised Greek Cypriot government and the breakaway Turkish Cypriot north.
The Greek Cypriot government has looked to Moscow for support in resolving the island's decade-old division. In 2004, Russia used its veto powers as a Security Council permanent member to block a UN reunification plan for the island that was strongly opposed by the Cypriot government.
"We continue to support a just solution for Cyprus ... Our position has not changed," Medvedev said.
Cyprus has been divided since 1974, when Turkey invaded the northern third of the island in response to a Greek-inspired coup.
UN-led talks are under way between the leaders of the two communities of Cyprus - Christofias and his Turkish Cypriot counterpart Dervis Eroglu - to find a negotiated settlement for unification.
While both sides agree that the island should unite under a federal power-sharing system, they cannot agree on how that would work.
The question of future governance is an integral part of the Cypriot problem, as well as disputes over the rights of thousands of displaced persons and the presence of about 30,000 Turkish troops in the north.