Novaya Gazeta has opened its own investigation into the murder Anna Politkovskaya, with a major shareholder announcing the reward.
"As long as there is a Novaya Gazeta, her killers will not sleep soundly," the paper said in a front page editorial today, its first issue since the killing.
Politkovskaya, 48, was shot in her apartment building as she stepped out of a lift.
The killer first fired in her chest, then finished her off with a shot to the head, Russian news agencies quoted police as saying.
Police released security camera footage showing the chief suspect, a man wearing dark clothing and a dark baseball cap.
The Moscow prosecutor's office says investigators are examining Politkovskaya's body and a 9mm Makarov pistol found at the scene.
Global condemnation
The European Union and the United States joined Russian politicians, journalists and human rights activists in condemning her execution-style slaying.
However, the Kremlin, which Politkovskaya had so often bitterly criticised, remained silent.
Colleagues said she had been murdered because of her reporting.
Her newspaper revealed she had been preparing an article on torture in Chechnya for today's edition.
Law enforcement officials say the official investigation will focus on Politkovskaya's professional activities.
Politkovskaya was the 42nd journalist killed in Russia since the collapse of the Soviet Union in 1991, and the 12th in a contract-style murder since President Vladimir Putin came to power in 2000, according to the New York-based Committee to Protect Journalists.
Dangerous trade
Grave-faced, with large reading glasses and grey hair,
Politkovskaya, the mother of two grown-up children, never resembled the cliched image of the war reporter.
However, she was among the last Russian journalists still covering human rights abuses by the armed forces and Chechen militias during the more than decade-old conflict that has devastated Chechnya, a tiny Muslim region in the Caucasus mountains.
Politkovskaya's harrowing reportage stood out increasingly in a country where, following Mr Putin's rise to power, journalists have all but abandoned criticism of the Kremlin or the conflict in Chechnya.
In her last interview on US-run Radio Liberty, Politkovskaya announced she would be appearing as a witness in a torture and abduction case allegedly involving the Kremlin's controversial strongman in Chechnya, Ramzan Kadyrov.
She had received several prizes for her daring investigations, including the Russian Union of Journalists' Golden Pen award and the Journalism and Democracy award from the Organisation for Security and Cooperation in Europe.
Despite that international fame, Politkovskaya had received previous death threats and, in 2004, claimed that she had been poisoned by the secret services.