The move drew outrage and cries of "annexation" in Georgia and sent a chill through those in Abkhazia who fear that wealthy Russians will snap up their precious coastline. It also raised further suspicions in the West about Russian President Vladimir Putin's territorial aspirations after his annexation of Ukraine's Black Sea peninsula of Crimea in March.
Under the treaty signed by Putin and Abkhazia's leader in the nearby Black Sea resort of Sochi, Russian and Abkhazian forces in the territory will turn into a joint force led by a Russian commander.
Putin said Moscow will also double its subsidies to Abkhazia to about 9.3 billion rubles (over $200 million) next year.
"I'm sure that cooperation, unity and strategic partnership between Russia and Abkhazia will continue to strengthen," he said.
"Ties with Russia offer us full security guarantees and broad opportunities for socio-economic development," Abkhazian President Raul Khadzhimba said.
Russian troops have been deployed in Abkhazia for more than two decades since the region of 240,000 people broke away from Georgia in a separatist war in the early 1990s. Still, Monday's agreement reflected a clear attempt by Moscow to further expand its presence and came only after a change of leadership in the territory.
Coming amid a chill in Russia-West ties over the Ukrainian crisis, the deal raised concern about Moscow's plans. The Black Sea region has always been important for Putin, who justified the annexation of Crimea by saying it would guarantee that NATO warships would never be welcome on the peninsula, the home base of the Russian Black Sea Fleet.
NATO's secretary-general condemned the treaty, stressing that the alliance supports Georgia's sovereignty. He also called on Russia to reverse its recognition of Abkhazia and South Ossetia, another breakaway province, as independent states.
"This so-called treaty does not contribute to a peaceful and lasting settlement of the situation in Georgia," Jens Stoltenberg said. "On the contrary, it violates Georgia's sovereignty and territorial integrity and blatantly contradicts the principles of international law, OSCE principles and Russia's international commitments."
The U.S. also said it wouldn't recognize Russia's move and expressed continued support for Georgia's sovereignty.
"The United States will not recognize the legitimacy of any so-called 'treaty' between Georgia's Abkhazia region and the Russian Federation," the U.S. State Department said in a statement.
Abkhazia's former leader, Alexander Ankvab, was forced to step down earlier this year under pressure from protesters who reportedly were encouraged by the Kremlin. Khadzhimba, a former Soviet KGB officer, was elected president in an early vote in August that Georgia rejected as illegal.
Unlike Ankvab, who had resisted Moscow's push to let Russians buy assets in Abkhazia, Khadzhimba has appeared more eager to listen to Russia's demands.
The Georgian Foreign Ministry denounced the new agreement as a "step toward the de-facto annexation" of Abkhazia and called on the international community to condemn the move.