A controversial Soviet-era paper mill on the shores of Lake Baikal will be closed down, a government spokeswoman said Thursday, after years of complaints about pollution at the UNESCO-protected Siberian site.

"A decision has been made to shut down the Baikalsk Pulp and Paper Mill," a spokeswoman for Deputy Prime Minister Arkady Dvorkovich told AFP. "The enterprise will be closed down over the course of the next few years."

Generations of environmental activists had fought for the closure of the mill, which began operations in 1966, saying it endangers Baikal's fragile ecosystem by spewing waste into the lake.

The work of the paper mill was halted in 2008 but Vladimir Putin, then prime minister, reversed the ban in 2010, citing unemployment concerns. The plant employs nearly 1,700 people.

State development bank Vnesheconombank, which is tasked with restructuring the paper mill's debt, estimates it will take at least two years to shut it down.

Arkady Ivanov, head of the Baikal programme at Greenpeace in Russia, hailed the government decision but expressed surprise at the pace of the planned phase-out.

"We are very happy about this decision because Greenpeace and other environmental organisations have for many years fought for this decision," he told AFP.

"It is not very clear why the closure will take so long. According to our estimates, the enterprise can begin being dismantled already this summer."

The Russian government plans to develop alternative economic activities for the region, mainly in tourism and ecology.

Lake Baikal, the world's deepest freshwater lake and a UN World Heritage site, is renowned for its unique flora and fauna and contains about 20 percent of the planet's freshwater reserves.

Late North Korean leader Kim Jong-Il on a visit to Siberia in 2011 swam in a pool filled with Lake Baikal water, which locals believe has medicinal powers.