Russia has pulled back troops in two key areas of the eastern area of Kharkiv where a Ukrainian counter-offensive has made significant gains.
The news could become the biggest battlefield success for Ukrainian forces since they thwarted a Russian attempt to seize the capital, Kyiv, at the start of the war.
“The Russian army in these days is demonstrating the best that it can do — showing its back," Ukrainian President Volodymyr Zelensky said in a video released by his office Saturday night.
“And, of course, it’s a good decision for them to run."
Russian Defence Ministry spokesman Igor Konashenkov said troops would be regrouped from the Balakliya and Izyum areas to the eastern Donetsk region.
Izyum was a major base for Russian forces in the Kharkiv region, and earlier this week social media videos showed residents of Balakliya joyfully cheering as Ukrainian troops moved in.
Mr Konashenkov claimed the Russian move was being made "in order to achieve the stated goals” of Russia’s unprovoked war, which it insists on calling a liberation effort.
The claim of a withdrawal to concentrate on Donetsk is similar to the justification Russia gave for pulling back its forces from the Kyiv earlier this year.
Earlier Saturday, Ukrainian officials claimed major gains in the Kharkiv region, saying their troops had cut off vital supplies to Izyum.
Foreign Ministry spokesman Oleh Nikolenko also suggested Ukraine’s troops had retaken Kupiansk, a town along the main supply route to Izyum, long a focus on the Russian front line.
The Ukrainian Security Service posted a message hours later saying troops were in Kupiansk, further suggesting it had been seized.
British officials said Saturday that it believed Ukrainian troops had advanced as much as 30 miles south of Kharkiv, and described Russian forces around Izyum as "increasingly isolated."
“Russian forces were likely taken by surprise. The sector was only lightly held and Ukrainian units have captured or surrounded several towns," the Ministry of Defence said.