The Russian military says the flagship of its Black Sea fleet sank while being towed to a port after being badly damaged.
The Russian Defence Ministry said the Moskva sank on Thursday in a storm after being gutted by fire, the AP has confirmed.
The ministry previously said that a fire on the warship set off some of its weapons and forced the crew to evacuate.
Ukrainian officials said that the warship was hit by Ukrainian missiles late Wednesday off the Ukrainian Black Sea port of Odesa.
The Russian military sustained a major blow when the warship was badly damaged and its crew evacuated.
"This is a big blow to the Black Sea fleet, this is... a key part of their efforts to execute some sort of naval dominance in the Black Sea," Pentagon spokesman John Kirby told CNN. "This is going to have an effect on their capabilities."
The warship named for the Russian capital was 60 to 65 nautical miles south of Odesa when the fire ignited, and the vessel was still battling flames hours later while heading east, according to a Pentagon official.
The loss of the ship represents a major military setback and a devastating symbolic defeat for Moscow as its troops regroup for a renewed offensive in eastern Ukraine after retreating from much of the north, including the capital.
Russia said the fire aboard the ship, which would typically have 500 sailors on board, forced the entire crew to evacuate. It later said the blaze had been contained and that the ship would be towed to port with its guided missile launchers intact.
The ship can carry 16 long-range cruise missiles, and its removal from combat would greatly reduce Russia's firepower in the Black Sea. Regardless of the extent of the damage, any attack would represent a huge blow to Russian prestige in a war already widely seen as a historic blunder. Now entering its eighth week, Russia's invasion has stalled because of resistance from Ukrainian fighters bolstered by weapons and other aid sent by Western nations.
Satellite photos from Planet Labs PBC show the Moskva steaming out of the port of Sevastopol on the Crimean Peninsula on Sunday. But cloud cover on Thursday made it impossible to use satellite images to locate the ship or determine its condition.
The news of the flagship's damage overshadowed Russian claims of advances in the southern port city of Mariupol, where they have been battling the Ukrainians since the early days of the invasion in some of the heaviest fighting of the war — at a horrific cost to civilians.
Russian Defence Ministry spokesman Major General Igor Konashenkov said that 1026 Ukrainian troops surrendered at a metals factory in the city. But Vadym Denysenko, adviser to Ukraine's interior minister, rejected the claim, telling Current Time TV that "the battle over the seaport is still ongoing today".
It was unclear how many forces were still defending Mariupol.
Russian state television broadcast footage that it said was from Mariupol showing dozens of men in camouflage walking with their hands up and carrying others on stretchers. One man held a white flag.
Mariupol's capture is critical for Russia because it would allow its forces in the south, which came up through the annexed Crimean Peninsula, to fully link up with troops in the eastern Donbas region, Ukraine's industrial heartland and the target of the coming offensive.
The Russian military continues to move helicopters and other equipment together for such an effort, according to a senior US defence official, and it will likely add more ground combat units "over coming days". But it's still unclear when Russia could launch a bigger offensive in the Donbas.
Moscow-backed separatists have been battling Ukraine in the Donbas since 2014, the same year Russia seized Crimea. Russia has recognised the independence of the rebel regions in the Donbas.
The loss of the Moskva could delay any new, wide-ranging offensive.
Maksym Marchenko, the governor of the Odesa region, across the Black Sea to the northwest of Sevastopol, said the Ukrainians struck the ship with two Neptune missiles and caused "serious damage".
Oleksiy Arestovych, an adviser to Ukraine's president, then said the ship sank, calling it an event of "colossal significance". But Yuriy Sak, an adviser to Ukraine's defence minister, later said he was unable to confirm that the ship was sunk or even hit by Ukrainian forces. He said he was aware of the comments by other Ukrainian officials but "could neither confirm nor deny" what happened.
"If or when this is confirmed, if it is confirmed, we can only have a sigh of relief because this means that fewer missiles will reach Ukrainian cities," he told the Associated Press.
Russia's Defence Ministry said ammunition on board detonated as a result of a fire, without saying what caused the blaze. It said the "main missile weapons" were not damaged. In addition to the cruise missiles, the warship also had air-defence missiles and other guns.
The Neptune is an anti-ship missile that was recently developed by Ukraine and based on an earlier Soviet design. The launchers are mounted on trucks stationed near the coast, and, according to the Washington-based Center for Strategic and International Studies, the missiles can hit targets up to 280 kilometres away. That would have put the Moskva within range, based on where the fire began.
During the first days of the war, the Moskva was reportedly the warship that called on Ukrainian soldiers stationed on Snake Island in the Black Sea to surrender in a standoff. In a widely circulated recording, the soldier responds: "Russian warship, go (expletive) yourself."
Meanwhile, Russian have authorities accused Ukraine of sending two low-flying military helicopters across the border and firing on residential buildings in the village of Klimovo in Russia's Bryansk region, some 11 kilometres from the frontier. Russia's Investigative Committee said seven people, including a toddler, were wounded.
Russia's state security service had earlier said Ukrainian forces fired mortar rounds at a border post in Bryansk as refugees were crossing, forcing them to flee.
The reports could not be independently verified. Earlier this month, Ukrainian security officials denied that Kyiv was behind an air strike on an oil depot in the Russian city of Belgorod, some 55 kilometres from the border.