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Four Russian citizens are among 13 people arrested in Georgia on suspicion of spying for the Kremlin.
Georgian officials say the spy ring allegedly fed sensitive military information to Moscow.
Ministry spokesman Shota Utiashvili said the suspects, who included Georgian military officers, had been providing secret information on Georgian defences to the Russian military's foreign intelligence service, the GRU.
"This is a huge deal in terms of Georgia securing its military intelligence and a big blow to the GRU," Mr Utiashvili said.
Officials said that Georgian security services had managed to infiltrate the covert cell, and six of the citizens arrested were pilots in the Georgian air force.
The Georgian Interior Ministry said several dozen people had been found to be working for Russian military intelligence.
It said the alleged spy ring had passed on information about military hardware supplies to Georgia, personnel figures, weapons details and air force flight schedules.
"We can say the whole network has now been uncovered," Utiashvili said.
Russia responded and said the entire case was a "fabrication" and that the accused had nothing to do with Russia's security services.
The Russian Foreign Ministry accused Georgia of a "provocation" timed to undermine the Russia-NATO summit in Lisbon on November 19-20.
"Saakashvili's regime suffers from chronic spy mania and an anti-Russian bias," the ministry said in a statement.
It said Georgia frequently invented scandals to score political points at home and abroad.
Georgia and Russia fought a brief war in August 2008 that saw Russian forces pour into the country to repel a Georgian military attempt to retake the Moscow-backed rebel regions of South Ossetia and Abkhazia.
Tensions between the two neighbours had been growing for years in the run-up to the war.
In 2006, Georgia arrested four Russian military officers on espionage charges - all four were eventually released and returned to Russia.
The announcement followed recent reports that 20 people had been arrested on suspicion of passing secret information to Russia.
Russian Prime Minister Vladimir Putin, himself a former KGB agent, reportedly met a spy ring expelled from the US last July and sang patriotic songs with the group.
The group of 10 spies, many of whom had been working for years undercover in the US as sleeper agents, were also awarded state honours.
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