Russia and South Ossetia on Wednesday signed a Treaty on Alliance and Integration that calls for forming a common defence and security space between Moscow and Georgia’s breakaway region.

Russian President Vladimir Putin hailed the treaty as "a landmark document", while NATO condemned the accord as “yet another move by the Russian Federation” that violates Georgia’s sovereignty and territorial integrity.

"Today we made another important step towards further consolidation of partnership ties," Putin told reporters after talks with his South Ossetian counterpart Leonid Tibilov, according to ITAR-TASS.

The treaty was signed for a 25-year period, with an option for a ten-year extension after expiry. According to the document, Moscow will allocate one billion roubles (USD 16 M) in its 2016 budget to the implementation of the treaty.

The document calls for separate units of South Ossetia’s army to be integrated into Russia’s armed forces, setting up free border crossing between Russia and South Ossetia, and conducting a coordinated foreign policy.

Russia signed a similar treaty with Abkhazia, another breakaway region of Georgia, in November last year.

NATO does not recognize the so-called treaty on alliance and integration between the South Ossetia region of Georgia and Russia, which violates Georgia’s sovereignty and territorial integrity and does not contribute to a peaceful and lasting settlement of the situation in Georgia, NATO Secretary General Jens Stoltenberg said in a statement.

“We continue to call on Russia to reverse its recognition of the South Ossetia and Abkhazia regions of Georgia as independent states and to withdraw its forces from Georgia,” the statement said.