"An Iskander missile system will be deployed in the Kaliningrad Region to neutralize if necessary the anti-ballistic missile system in Europe," Medvedev said in his first state of the nation address to parliament.
Moscow has repeatedly expressed its opposition to Washington's plans to place 10 interceptor missiles in Poland and an accompanying radar in the Czech Republic, saying they threaten Russia's national security.
The United States claims the new bases are needed to counter missile attacks by "rogue states" such as Iran.
Medvedev also said that Russia had cancelled plans to take three missile regiments out of service in a region to the west of Moscow.
"We earlier planned to remove three missile regiments of a missile division deployed in Kozelsk [Kaluga Region] from combat duty and disband the division by 2010. I have made a decision to withdraw these plans," Medvedev said, noting that Russia had been forced to take this measure.
The division has RS-18 Stiletto intercontinental ballistic missiles with a range of 10,000 kilometers (6,200 miles).
The U.S. signed deals on the missile shield with Warsaw and Prague during the summer. Polish and Czech lawmakers have yet to ratify the agreements.
The planned missile shield has been one of the main points of contention between Russia and the U.S., former Cold War foes.
Russian officials earlier said Moscow could also deploy its Iskander tactical missiles and strategic bombers in Belarus, and warned that Russia could target its missiles at Poland.
Medvedev said in his address that Russia would not be drawn into an arms race, but would continue to ensure the security of its citizens.
He said that Russia was faced with threats and challenges in particular "the emergence of a global missile defense system, the surrounding of Russia with military bases, unrestrained NATO expansion and other 'gifts'."
"We will certainly not allow ourselves to be drawn into an arms race, but we are forced to take these into account," he said.
