The unmanned Progress M-27M cargo ship, carrying almost 3 tonnes (2,722 kg) of supplies, was unable to dock with the International Space Station (ISS) because of problems after it launched from the Baikonur Cosmodrome in Kazakhstan early on Tuesday, said Roscosmos head Igor Komarov.
Komarov listed a series of technical problems that caused the freighter to tumble out of control shortly after it reached its preliminary orbit.
"Because of this, the craft's continued flight and its docking with the ISS is not possible," he told a news conference.
Space exploration is a subject of national pride in Russia, rooted in the Cold War "space race" with the United States, but the collapse of the Soviet Union starved the space programme of funds and it has been beset by problems in recent years.
Industrial disputes and accusations of corruption have plagued the construction of the flagship Vostochny Cosmodrome in Russia's far east and Roscosmos announced last week it was cutting spending by more than a third over the next 10 years because of the country's economic crisis.
Wreckage unlikely to reach earth
The total cost of Progress cargo ship and its booster rocket was 2.59 billion roubles, a Roscosmos spokesman told Reuters. Launch dates for two more Progress cargo ships will be delayed until the third and fourth quarter of this year, said Roscosmos deputy-head Alexander Ivanov.
Wreckage from the doomed Progress M-27M ship is likely to burn up as it re-enters the atmosphere, said Vladimir Solovyev, flight director for the Russian section of the ISS.
"(The descent trajectory) indicates that the structural elements of the ship will not reach the Earth's surface," he said.
Any surviving debris will probably land between May 5-7 but experts will not know exactly where it will fall for at least another two days, Solovyev added.
The Progress ship is currently orbiting approximately 123 miles (197 km) above earth, according to satellite tracking website n2yo.com. NASA told Reuters in an email it did not know when the Progress capsule would re-enter the atmosphere.
The current crew on the International Space Station comprises Americans Terry Virts and Scott Kelly, Russians Anton Shkaplerov, Gennady Padalka and Mikhail Korniyenko, and Italian Samantha Cristoforetti. ($1 = 51.0739 roubles)
(Additional reporting by Timothy Heritage and Gleb Stolyarov in Moscow and Irene Klotz in Cape Canaveral; Editing by Elzabeth Piper and Susan Fenton)
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