People walk past the Russian foreign ministry headquarters in Moscow on Tuesday. AFP
This is the first time Russia has expelled an ambassador of an EU country since Moscow sent troops to Ukraine on February 24.
"The Russian side decided to downgrade the diplomatic representative in both countries to charge d'affaires ad interim," the foreign ministry said in a statement.
"The ambassador of the Estonian Republic will have to leave the Russian Federation on February 7," the ministry said.
The measures come after Estonia drastically reduced staff levels at Russia's embassy in Tallinn, the statement said.
The ambassador, Margus Laidre, was informed of the decision after being summoned to the foreign ministry, it said.
The foreign ministry accused Estonia of "purposefully destroying" relations with Moscow.
"Total Russophobia, the cultivation of hostility towards our country have been elevated by Tallinn to the rank of state policy."
Estonia is a staunch ally of Ukraine, and has called for Western countries to send tanks to Kyiv to counter Moscow's offensive.
The Baltic country was once part of the Soviet Union and has had difficult relations with Russia for years, especially divided over historical memory.
Russia ordered the closure of Tallinn's consulate in its second city of Saint Petersburg in April last year.
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