Fonterra says any free-trade deal with Russia could be a major boost to its sales to the former Soviet powerhouse
New Zealand and Russia have agreed to a scoping study - the usual precursor to the start of any free-trade negotiations.
Russia is the world's largest importer of butter and cheese - the two commodities that account for the bulk of New Zealand's exports to Russia, despite tariffs of up to 15%.
Fonterra chief executive Andrew Ferrier says cheese sales in particular have been held back by tariffs.
Trade Minister Tim Groser, who met his Russian counterpart in Moscow in Monday, says Russia has agreed to proceed towards a formal trade agreement with New Zealand, subject to successful preliminary discussions.
Mr Groser says a deal with Russia, and its partners Belarus and Kazakhstan, is an opportunity for New Zealand to future-proof its relationship with an emerging economic powerhouse.
New Zealand exports to Russia have grown at an annual rate of 23% since 2000, and were worth $187 million last year.