The capacity of the venture is planned at 160,000 cars a year, 70% of which will be Peugeot Citroen mid-sized models, and 30% Mitsubishi mid-sized sport utility vehicles. Production is due to start in 2011.
Speaking at the ceremony, Roland Vardanega, a member of the Peugeot Citroen management, said the French carmaker was looking to consolidate its position on the booming Russian market.
Vardanega said the joint venture's output would eventually be increased to 300,000 cars annually, with all the vehicles to be sold in Russia.
Mitsubishi sold 107,000 vehicles in Russia in 2007 and hopes to sell 140,000 this year.
Peugeot plans to sell 100,000 cars and Citroen some 50,000 in Russia in 2010. In 2007, Peugeot Citroen sold over 36,000 cars in Russia.
Germany's Volkswagen company opened a car assembly plant in the Kaluga Region, located some 180 km (84 miles) southwest of Moscow, in November 2007. The region was also chosen as the site for a Volvo Trucks plant under a deal signed last June.
