"We have cut those budgeted costs by 15 percent," Deputy Prime Minister Dmitry Kozak said at a meeting with Prime Minister Vladimir Putin, quoted by the government's Web site.
He did not state an exact figure for the new estimate.
In 2008, the government conservatively estimated that the 200 construction projects for the Sochi Olympics would cost $12 billion. The state was set to put up $7.5 billion, with the rest to come from the private sector. With the plummeting ruble, the bill has been reduced to $9.2 billion.
Russia won the bid to hold the games in the Black Sea resort city and the nearby Caucasus Mountains despite concerns about the enormous construction work that would be needed.
The ski slopes and snow-sport areas will require substantial expansion, none of the ice sport venues have been built, the region's hotels are insufficient and outdated and only a narrow winding road connects the mountain snow-sport area with the seaside ice-sports section.
Kozak said last month that the Olympic budget would be reviewed due to lower prices of construction materials and a weaker ruble.
Russia is widely expected to plunge into recession this year and is facing its bleakest economic outlook since the 1998 financial crisis, hurt by both the global credit crunch and slumping oil prices.
On Tuesday, Kozak sought to ease fears that the global financial crisis may affect the Sochi Olympics and confirmed a steady investor interest in the Olympic projects.
