Russia has already stationed a first batch of tactical nuclear weapons in Belarus, Vladimir Putin says.
The US government says there is no indication the Kremlin plans to use nuclear weapons to attack Ukraine.
“We don’t see any indications that Russia is preparing to use a nuclear weapon,” US Secretary of State Antony Blinken said after Mr Putin’s comments.
Belarus is a key Russian ally and served as a launchpad for Mr Putin’s full-scale invasion of Ukraine in February last year.
Mr Putin said transferring the tactical nuclear warheads would be completed by the end of the summer.
Answering questions after a speech at the St Petersburg International Economic Forum, Russia’s president said the move was about “containment” and to remind anyone “thinking of inflicting a strategic defeat on us”.
When asked by the forum’s moderator about the possibility of using those weapons, he replied: “Why should we threaten the whole world? I have already said that the use of extreme measures is possible in case there is a danger to Russian statehood.”
Tactical nuclear weapons are small nuclear warheads and delivery systems intended for use on the battlefield, or for a limited strike. They are designed to destroy enemy targets in a specific area without causing widespread radioactive fallout.
The smallest tactical nuclear weapons can be one kiloton or less (producing the equivalent to a thousand tonnes of the explosive TNT). The largest ones can be as big as 100 kilotons. By comparison, the atomic bomb the US dropped on Hiroshima in 1945 was 15 kilotons.
The Russian leader is due to meet African leaders in St Petersburg after they visited Kyiv on Friday as part of a peace initiative they are presenting to both countries.
However while they were in the city it came under Russian missile attack.
South African President Cyril Ramaphosa called for de-escalation on both sides and negotiations for peace.
“We came here to listen and recognise what the people of Ukraine have gone through,” he said.
But Ukraine’s President Volodymyr Zelensky said instead of making diplomatic overtures to Russia it should be frozen out diplomatically to send a message that the international community condemned its invasion.
Kyiv would not enter negotiations with Moscow while it still occupied Ukrainian territory, Mr Zelensky said.
Mr Putin also repeated his claim that Ukraine stood no chance of succeeding in its ongoing counter-offensive.
The Ukrainian military was also running out of its own military equipment and would soon only be using Western-donated equipment, he said.
“You can’t fight for long like that,” he said, warning that any F16 US fighter jets given to Ukraine “will burn, no doubt about it”.
Ukraine has previously dismissed similar remarks, asserting they are making progress in recapturing territory in both eastern and southern Ukraine.
On Friday, Ukraine’s Deputy Defence Minister Hanna Malyar said in the south of the country units had advanced 2km in all directions.
The BBC cannot independently verify battlefield claims.
The Russian leader also addressed economic themes, claiming that Western sanctions on Russia had failed to isolate it and instead led to an expansion in its trade with “the markets of the future”.
He praised new deals with countries in Asia, the Middle East and Latin America – calling them “reliable, responsible partners”.