The Moskvich, which means "a native of Moscow", was first manufactured in the Soviet Union and designed to be a sturdy, affordable passenger car, featuring parts made in Russia and communist East Germany.
Following the Soviet Union's collapse, the car's manufacturer was privatised and later was declared bankrupt.
There are almost 200,000 Moskvich cars still registered in Russia, including 46,000 that are more than 35 years old, according to the Autostat analytical agency.
For Sobyanin, who called the car "legendary", the return of the Moskvich may prove practically difficult, Autostat head Sergei Tselikov said.
"It takes at least two years and at least $1 million to develop a new car," Tselikov said when asked about plans to revive the Soviet-era brand.
Sobyanin said the revived Moscow plant would initially make conventional cars with combustion engines, but would produce electric cars in the future.
He said he was working with Russia's trade ministry to source as many car components as possible from Russia, and that Russian truckmaker Kamaz would act as the plant's main technological partner.
In a statement, Kamaz said that while it supported the mayor's decision, issues regarding technological cooperation were still under discussion and it would make an official statement once those issues were resolved.
Russia calls its actions in Ukraine a "special operation" to disarm Ukraine and protect it from fascists. Ukraine and the West say the fascist accusation is baseless and the war is an unprovoked act of aggression.
