Mutko said that Lokomotiv Yaroslavl would be demoted to a lower league as part of a gradual rebuilding program, in line with the team management's wishes.
"At a meeting with the president, we arrived at the conclusion that we must support those decisions taken by the club," Mutko said after a high-level discussion on plans for Lokomotiv chaired by Russian President Dmitry Medvedev.
Lokomotiv president Yury Yakovlyev said the team might begin playing in December in the Major Hockey League, which is the second tier of Russian hockey.
By way of a concession, Lokomotiv will be automatically eligible to compete in next year's playoffs, regardless of where it places in the MHL.
The crash Wednesday of a chartered Yak-42 jet outside the western city of Yaroslavl took the lives of 28 players, two coaches and seven other Lokomotiv staff. Alexander Galimov, the only member of the team to initially survive the crash in which a total of 44 people were killed, died Monday of his injuries in a Moscow hospital.
Top hockey officials had earlier expressed hopes Lokomotiv could be revived in time to take part in the current season, which began Monday, by drafting in players from other KHL teams. Those plans appear to have been shelved in favour of more long-term reconstruction plans.
Mutko said the rebuilding of Lokomotiv would take place in a series of stages.
The first step will be transferring the team to the Major Hockey League. After that, youth players from other clubs will be permitted to transfer to Lokomotiv, Mutko said.
Yakovlyev said Lokomotiv's farm team of young and up-and-coming players would be used as the base on which to create a new squad. He added that before next season, Lokomotiv would seek to attract players with expired contracts and have the quota for foreign players increased to six — one more than for other teams.