The Dnepr carrier rocket, a civilian version of the heavy R-36M2 Voyevoda (SS-18 Satan) intercontinental ballistic missile, was launched around midnight (8 p.m. GMT Wednesday) but experienced a second stage breakdown 86 seconds into the flight.
"In the 86th second of the flight, an emergency engine shutdown has occurred on board the Dnepr carrier rocket," a spokesman said.
No casualties or environmental damage have been reported and a special investigation commission has launched a probe into the accident, the source said.
Russia has been using converted ballistic missiles to launch satellites into orbit since 1999. The Dnepr, which was seen as a highly reliable carrier rocket, has a lift-off weight of about 250 metric tons and can carry a satellite payload of up to 3.7 tons to orbits at an altitude of 300-900 kilometers (185-560 miles).
