Russian President Vladimir ­Putin on Thursday said Moscow was completing negotiations on a "large-scale" prisoner swap with Kiev, in what could be a step toward easing tensions between the neighbors. 

Putin's first comments on the long-reported exchange came as a Ukrainian court released a former pro-Russian separatist suspected of involvement in the downing of flight MH17.

"We're reaching the final stage of talks on the swap... it will be large-scale," Putin told an economic forum in the Russian city of Vladivostok, adding that the date of the exchange would soon be announced.

He said a swap would be "a huge step toward normalizing relations."  

The Russian side found it difficult to agree to the names Ukraine had put forward for the swap, the president added, without providing details of any decisions.

Meanwhile in Kiev, Vladimir Tsemakh's release from pre-trial detention sparked speculation that he would be used as part of the swap despite his alleged role in the downing of MH17.

The Kremlin has demanded that Tsemakh is on the list of prisoners to be exchanged, according to Russian and Ukrainian media reports. 

Tsemakh is a Ukrainian who is believed to have been in charge of an air defense unit in the forces of the separatist Donetsk People's Republic near Snizhne in eastern Ukraine.

This is where Malaysia ­Airlines flight MH17 came down in 2014, killing 298 people, most of them Dutch citizens.

European lawmakers describe Tsemakh as a "key suspect" and have asked Kiev to keep him available for testimony in the probe.

Last week Ukraine released Russian state media journalist Kyrylo Vyshynsky, who had been in custody for more than a year, pending a trial for "high treason".