Some of the heaviest fighting of the entire Russian invasion of Ukraine has taken place in Severodonetsk, where street-by-street battles have been going on for a month, with Russia slowly and painstakingly taking more ground.
"Remaining in positions smashed to pieces over many months just for the sake of staying there does not make sense," Governor Serhiy Gaidai said on television.
He did not indicate whether troops would be withdrawn immediately, or over what time frame any withdrawal would happen.
The battle for the city is key for Russia to establish control over the last remaining Ukrainian-held sliver of the Luhansk region, with only the city of Lysychansk left in Ukrainian hands if Severodonetsk were to fall.
Luhansk region is one of two provinces that make up the Donbas, an area which Russia and its separatist allies in east Ukraine aim to fully capture as one of their war aims.
"In many respects, the fate of the Donbas is being decided there," Ukrainian President Volodymyr Zelenskiy said of Severodonetsk recently.
With world leaders preparing to meet at the G7 summit in Germany at the weekend before a meeting of Nato allies in Madrid next week, there are concerns in Kyiv that Germany and France will push Ukraine President Volodymyr Zelensky to accept a ceasefire deal that would see him concede land to Moscow.
But Boris Johnson, who is at a summit of Commonwealth leaders in Rwanda, said he was confident Ukraine could win and that it would be a “disaster” if the country was forced to accept a bad peace deal.
The Prime Minister said: “I think they are going to win. I know they are going to win. It is their country. They are fighting for it desperately hard.”
“But they need to be properly supported. So, my message to colleagues at the G7 and at Nato in particular is going to be now is not the time to settle and encourage the Ukrainians to settle for a bad peace, for a peace by which they are invited to give up chunks of their territory in return for a ceasefire.”
His comments come a day after EU leaders accepted Ukraine’s candidacy to join the European Union.
President Zelenskiy said the decision was among the most important for Ukraine since it broke from the Soviet Union 31 years ago.
“But this decision is not just being made for the benefit of Ukraine. It is the biggest step towards strengthening Europe that could have been made right now, in our time, and when the Russian war is testing our ability to preserve freedom and unity,” he said.
President Zelensky has vowed not to rest until Russia’s defeat and full membership had been secured.
“We can defeat the enemy, rebuild Ukraine, join the EU, and then we can rest,” he said in a video released by his office.
Meanwhile Ukrainian troops repelled a Russian attack on the southern outskirts of Lysychansk, the last fully Ukrainian-controlled city in the region of Luhansk, the area’s governor said on Friday.
Serhiy Gaidai wrote on the Telegram messaging app that Russia had, however, taken control of the village of Mykolaivka, located near a key highway to Lysychansk, which has been the focus of heavy fighting.