The fortress, which was built in the 14th century, is spread over a 2.4 hectare area and surrounded by 850 meters (2,800 feet) of ramparts, which in some areas are up to three meters (10 feet) thick. Local archaeologists are currently preparing a nomination for the building to be included as a UNESCO world heritage site.
The restoration work is expected to take two years. This year a total of 10 million rubles ($430,000) was allocated from the federal budget for the first phase.
"In 2008 we plan to restore a part of the wall from the Lukovka tower to Nikolskie gates, and to reinforce arrow slits," she said.
Next year's planned restoration work will renew wooden roofing to the walls and reinforce the castles's secret passages.
The fortified town of Izborsk on the Estonian border was first mentioned in Russian chronicles in 682, by a resident of Truvor.
The fortress was built on a nearby hill in the early 14th century, but original buildings were predominantly wooden and did not survive. The most ancient building is now the Bashnya Lukovka, literary meaning 'Onion Tower,' which was constructed in the 1330s.
The fortress and the nearby museum of stone crosses have over 20,000 visitors each year.