Prigozhin said his forces would withdraw from the city of Bakhmut on May 10 to "lick our wounds" from the fight.
The Wagner Group founder said his troops have been "doomed to death" because of "bureaucrats" in Russia's Ministry of Defense who have deprived them of ammunition.
"You think that you are the masters of life and you think that you have a right to master their lives too," Prigozhin said in a video on Telegram. "If you give us the normal ammunition, there will be five times less bodies here."
Bakhmut has become a symbol of Ukrainian resistance and a potential prize for Russian forces, who have assaulted the city in a major campaign since the fall.
Prigozhin has frequently criticized Russian leadership during the siege for Bakhmut, often complaining about a lack of ammunition.
But ammunition supply is not a unique problem to Prigozhin, with most of the Russian army facing a shortage.
Anna Arutunyan, a fellow at the Wilson Center, told The Hill that "Prigozhin is fed up" with the war effort.
"He's fed up and I think he's reflecting a sense of others who are fed up with this," she said. "Bodies are piling up. There's not enough ammunition to go around as Russia prepares for a counter-offensive from Ukraine."
Arutunyan said it's possible Prigozhin makes a deal with the Kremlin and chooses not to withdraw. Other analysts have cast doubt on the announcement, suggesting it could be a strategic ploy to trick Ukraine ahead of its long-awaited counteroffensive.
Bakhmut is a strategic point in Ukraine's Donetsk region and the wider eastern Donbas, which Russia has pushed to seize this spring.
But the Russian offensive has so far come up short. Even after encircling Ukraine's soldiers in the city and throwing troops mercilessly at Kyiv's lines, Wagner Group has failed to take Bakhmut.
Prigozhin's announcement comes just ahead of Victory Day, a major day of observance honoring Moscow's triumph over Nazi Germany in World War II, at which Russian President Vladimir Putin is expected to speak next week.
"This is not anything that Putin or his people want to have to deal with," Matthew Hoh, a senior fellow at the Center for International Policy, told The Hill. "The perception is that things are out of control."
Read the full report at TheHill.com.
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