It is the first visit by a Russian leader to the North African country since the Soviet period.
Putin's visit was initially scheduled to start on March 9, but was delayed by 24 hours. No reason for the change was given.
The Algerian state news agency APS says the Russian delegation will sign contracts worth $1 billion. Russia's natural gas company Gazprom and the oil company LUKoil are among those due to sign deals.
The two sides will discuss purchases of Russian arms and deals to modernize existing weaponry.
Algeria's Soviet-era debt to Moscow, as well as the situation in the Middle East, will also be on agenda.
Putin is also expected to pledge support for Africa from the G8 group of leading industrialized nations, which Russia is chairing this year.
Kremlin aide Sergei Prikhodko says Putin is being accompanied by an array of ministers and businesspeople. Among those expected to travel with the Russian president are Foreign Minister Sergei Lavrov; LUKoil chairman Vagit Alekperov; Gazprom head Aleksei Miller; and Mikhail Dmitriyev, the head of the federal agency responsible for military and technical ties with foreign countries.
(AP, ITAR-TASS)