The new, fourth postwar generation Project 677 Lada class diesel-electric submarine is a successor to the Type 877EKM and Type 636 Kilo-class submarines. The Lada type is significantly smaller (1,600 tons D/W) than the previous Kilo type submarines (2,325 tons D/W), which may account for the problems encoutered in sea trials. It is generally configured for anti-surface and anti-submarine warfare, minelaying and special forces deployment.

The construction of the Project-677 Lada-class diesel submarine, named the St. Petersburg, began in 1997. The similar Lada-class (some sources consider this to be a Project 877 boat) Sankt Petersburg was begun the same day at the same facility for the Russian Navy. As of January 2000 the Sankt Petersburg was said to be about 30% complete and the Amur 1650 about 7% complete, and subsequently this boat faded from view. As of early 2001 Russian officials were predicting that the Sankt Petersburg would be launched during 2001. As of 2002 work on the Sankt Petersburg was suspended.

The Project 677 Lada submarines would have high submerged cruising range and endurance, combat efficiency and reliability, and low acoustic signature. The sonar equipment includes highly sensitive direct-listening transducers at the forward end and a towed transducer array. It would be outfitted with six torpedo tubes, and its 18 weapons would comprise a mix of torpedoes and torpedo-tube launched missiles. Measuring 67 meters in length and 7.2 meters wide, it would include an anechoic tile coating on the outer hull and a skewed 7-blade propeller. The vessel's surface speed would be 10 kt; submerged 21 kt. The submerged cruising range using economic speed is 500 nautical miles at 3 kt. The maximum diving depth is 250 m, with an endurance of 45 days with a crew of 34.

In addition:

• acoustic field of the submarine has been considerably reduced (in comparison with submarines of previous generations - several times);
• radio-electronic equipment of a new generation has been installed with a state-of-the-art element base;
• an integrated system has been installed for automatic control of submarine and its combat and technical facilities;
• an inertial navigation complex has been installed which provides safety of navigation and determination of motion parameters with specified missile armament accuracy during long underwater operation;
• a variable-speed propulsion plant of a new design has been fitted;
• a storage battery with increased service life has been installed.

New types of production and technological processes have been introduced in the course of construction, as follows:

• a work bay has been equipped for production of non-penetrating retractable devices and hoist masts;
• a testing bench has been produced for the above retractable devices and hoist masts;
• a technology of installation of highly sensitive hydrophone antenna of sonar system "LIRA" has been developed and introduced;
• a technology of application has been introduced for anti-sonar coating of a new generation "Molniya" ("Lightning");
• a technology of painting with "VICOR" of improved stability has been introduced.

The main objectives of the Russian Shipbuilding Agency for 2004 in the military sector included the delivery during the year of the Sankt Petersburg class diesel sub for the Russian and foreign customers; project 11356 frigate; mine sweeper; combat and patrol cutters, specialized and auxiliary ships (fire control, divers', hydrographic, demagnetizing, floating berths).

On 28 October 2004 the Sankt Petersburg, honoring the 300th anniversary of the city, was launched at Admiralteyskiye Verfi. The conventionally powered fourth-generation submarine of the Lada project, designed by the Rubin Central Design Bureau, marked the introduction of one of the first submarines specifically built for the Russian Navy since the collapse of the USSR. In 2005 the Russian fleet commissioned two ships, including the conventional submarine Sankt Petersburg of the maiden Project 677.

In July 2006 Konstantin Lantratov, Reporter for Kommersant Daily, reported that Vladislav Putilin, the deputy chairman of the Military-Industrial Commission, said that under the Russian State Armaments Program for 2007-2015 the Navy would receive six Project 677 Lada diesel-electric submarines.

In January 2007 St. Petersburg's Admiralty Shipyards said it would soon begin a final round of sea trials of a fourth-generation diesel submarine. At that time a second Lada-class submarine, the Kronshtadt, which was the first in the production series, was also being built at the shipyard and was to be commissioned by the Russian Navy in 2009. A third submarine, whose keel was laid 10 November 2006, was named after a city associated with Russian naval glory - Sevastopol, and was expected to be launched in 2010. On 25 July 2008 it was reported that Navy commander Adm. Vladimir Vysotsky stated that the construction of new-generation nuclear-powered ballistic missile and attack submarines was a top priority for the Russian Navy's development. At that time, the construction schedule for the Lada class submarines remained unchanged from 18 months earlier.

Diesel-electric submarines in the Russian Navy are represented by Kilo-class vessels. They would be gradually replaced by Project 667 Lada-class submarines. As of March 2009 the first submarine of the Lada class was undergoing sea trials and was to enter service with the Russian Navy in 2009. A second Lada class submarine, which was the first in the production series, was to be commissioned in 2009. A third submarine was expected to be launched in 2010.

Project 877 Paltus (Kilo class) submarines continued to age rapidly. As a result, the Navy had to order upgraded Project 636-M (Kilo class) submarines once again. In August 2010, the keel of a lead Project 636-M submarine was laid for the Black Sea Fleet. Project 636.3 diesel electric submarine Novorossiysk was laid down at Admiralteyskie Verfi shipyard (ST. Petersburg) 20 August 2010 at 12 pm. The sub would be delivered to the Navy in 2013; later on, other two submarines of the project would be laid down and in 2014 dispatched to south Russia.

A production rate of 1/year starting with laying down a fourth unit in 2008 would be needed to maintain existing force structure in the face of a plausible Kilo retirement schedule through 2020. Alternately, a building rate of two each year could be initiated after 2015 to achieve the same result, recognizing that the remaining Kilos were built at a rate of about two each year, and thus might also retire at about that rate.

The Russian Navy planned to build a total of eight Lada Class submarines, but by 2014 construction on the second and third units remained at a standstill, while the first unit, though nominally in commission, remained in sea trials.

Construction of the Sankt Peterburg, the lead ship of the Project 677, began in December 1997. It was introduced into the Navy for trial operations in April 2010. Two other ships of the class had been laid down. "The two Lada-class Project 677 submarines will be delivered as scheduled — in 2018 and 2019," an official representative of Russia's United Shipbuilding Corporation said 18 March 2016. Then the construction of the new non-nuclear Kalina-class submarines will be launched.