Australia can reclaim a proposed Russian embassy site but will need to compensate the authoritarian state for the forceful takeover.

The High Court ruled as valid federal laws passed to reclaim land Russia had leased to build a new embassy in Canberra on national security grounds.

But the Commonwealth was liable to pay a reasonable amount of compensation for the acquisition under the constitution, it said in its judgment on Wednesday.

The Commonwealth will need to pay half of Russia's cost for the case.

In 2023, Australia quickly passed laws to cancel Russia's lease on a plot of land where it planned to build an embassy a few hundred metres from Parliament House.

Russia rejected the cancellation of the 99-year lease, which was granted by the Australian government in 2008, as hostile

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