"We plan to do this by 2013," Anatoly Serdyukov said after meeting with President Dmitry Medvedev.
He said that under the previously approved plan, the troop numbers were to have gone down to 1,100,000 personnel by 2011 and to 1,000,000 by 2016.
"We intend to move faster and understand that budgetary allocations will have to be raised considerably," Serdyukov said.
A senior Russian General Staff official said earlier that the Defense Ministry was considering reducing the number of officers by moving some - mainly rear service officers and others not directly linked to combat duty - to civilian jobs.
Officers currently account for 30% of Russian troop numbers against around 16% in most countries.
Serdyukov said the ministry had asked for 100 billion rubles ($4.2 billion) of budget funds in 2009-2011 on bonuses to supplement monthly salaries for 30,000 officers serving in strategic aviation, navy, strategic missile forces, and space troops.
Using soaring oil and gas revenues, Russia has moved to modernize the armed forces and make military service more attractive.
The country is also struggling to move from conscription to a professional army and former President Vladimir Putin cut military service from two years to 18 months in 2007 and to one year in 2008.
Since the collapse of the Soviet Union the Russian armed forces have been plagued by corruption, hazing and widespread draft dodging, which along with an unhealthy population has created difficulties in meeting recruitment goals.
Serdyukov, a former tax inspector with no military background, was appointed defense minister by Putin last year and instructed to streamline management.
Earlier this year, Serdyukov ordered a sell-off of military property - mainly unused shooting ranges and neglected buildings - on Moscow's elite Rublyovskoye highway in a bid to raise money to build housing for over 100,000 military families, including those of retired officers.
