Moscow's forces took control of Bakhmut in May after a months-long battle that flattened the city.

"The village of Krasnoye in the Donetsk People's Republic was liberated," Russia's defence ministry said in a statement, using an old Russian name for the settlement.

Yevgeny Prigozhin, the now-deceased head of the Russian Wagner paramilitary group, said 20,000 of his fighters had died trying to capture Bakhmut.

Russian forces have claimed to have taken control of a string of frontline settlements in recent weeks, as Ukrainian troops suffer troop and ammunition shortages.

Last month they captured Adviivka, near the Russian-held stronghold of Donetsk city, further south.

That was the first major territorial gain since Bakhmut and was hailed by Russian President Vladimir Putin as showing his forces were back on the offensive.