Russia is close to completing its first warship fully equipped with stealth technology, local media said yesterday.

The Mercury corvette, known as Project 20386, has been mired in delays but is expected to be delivered to Russia’s navy as soon as next year, two shipbuilding industry sources told the state-owned news agency RIA Novosti.

The country’s shipbuilders have previously used stealth technology, such as a radar-absorbing coating, but the Mercury is expected to be Russia’s first fully stealth vessel, with a special shape to minimise protrusions and crevices on its surface, according to RIA Novosti.

In the past decade, Russia has invested heavily in a sweeping rearmament programme to replace the army and navy’s Soviet-era weaponry.

However, efforts to revamp the military have been affected by Western sanctions imposed on Russia for its annexation of Crimea in 2014 and support for separatists in eastern Ukraine.

The new warship will be armed with cruise missiles, anti-aircraft missiles and artillery. It will also have anti-submarine capabilities.

Before the annexation of Crimea, the Russian navy was prepared to drop building a full-stealth military ship.

In 2013, the Izvestia newspaper quoted a high-placed military source saying the ship would be too expensive, at up to 18 billion roubles (€200m), and equipped with “excessive” weaponry, such as the Kalibr cruise missiles.

Russia’s Military Review ran a scathing article about the Mercury in April, pointing to reported design failures such as the lack of necessary equipment to support the cutting-edge weaponry the vessel is supposed to carry.

Yesterday’s announcement came amid growing concerns about increasing military co-operation between Moscow and Beijing. Jens Stoltenberg, Nato’s secretary general, warned of a persistent threat to “the rules-based order” from the two countries.

“Russia and China have been co-operating more and more recently, both at a political and a military level,” he said in an interview with Italy’s La Repubblica newspaper. “This is a new dimension and a serious challenge for Nato.”

Russia has been eager to foster military ties with China in recent years as Moscow’s relations with the United States have hit a post-Cold War low.