Crimea and the city of Sevastopol were controversially formally incorporated into the Russian Federation as individual federation subjects on March 17 following the overthrow of Ukrainian President Viktor Yanukovych.

The action has been widely condemned by the international community and led to the United States and European Union imposing limited economic sanctions.

Kozak had been appointed in 2008 with sole responsibility of overseeing and coordinating the construction of the infrastructure for the Winter Olympics and Paralympics in Sochi.

He carried out his role so successfully that, in an unprecedented break with protocol, he was allowed to deliver the final address at the Closing Ceremony of the Winter Paralympics earlier this month instead of Sochi 2014 President and chief executive Dmitry Chernyshenko.

Dmitry Kozak (right), pictured with Russian President Vladimir Putin and International Olympic Committee chief Thomas Bach, had been overseen preparations for Sochi 2014 since 2008 ©Getty Images

Kozak, 55, was originally born in Ukraine but has worked closely with Putin since they were in charge of the St Petersburg city administration during the 1990s.

Kozak is expected to unveil proposals for designating Crimea and Sevastopol a special economic zone later this week.

The Kremlin is seeking extra-budgetary funds to finance the development of Crimea, either by dipping into financial reserves or by persuading Russian investors to fund specific projects as they funded much of the infrastructure for Sochi 2014.

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