Seven people including three children were reportedly killed and 40 were left injured after the UAV was intercepted by Russian air defences.
Chaotic scenes unfolded on the shores of Arkhipo-Osipovka, near Putin’s secret Gelendzhik lair, following the shoot down.
Dramatic footage showed the drone hurtling towards tourists on the popular beach after being damaged by Putin’s defence gunners.
Plumes of thick grey smoke were seen rising from the crash site as panicked beachgoers fled the water.
Many were even seen cowering under sun loungers during the carnage.
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While holidaymakers at the beach complained there were no warning sirens, air defence machine guns were reportedly heard moments before the blast.
It is unclear what the drone was targeting – but Putin’s high-security palace is located just 27km along the coastline.
Ukraine has not yet commented on the deadly drone explosion.
One witness said: “I’m in complete shock.
“We were on the beach, didn’t have time to leave, hid behind a ledge, covered ourselves with sun loungers, and didn’t see where it exploded.”
Another bystander said: “While we were parking, we saw crowds of people leaving the beach, cars driving away.
“A friend called me and said we had to turn around and leave because a drone had crashed.
“We saw a man with a bloody shoulder.”
A terror-struck tourist said: “I’m leaving here with my family.
“This all happened in front of the children, and the child is having a nervous breakdown.”
Putin’s clifftop palace in Gelendzhik boasts a wooden throne and previously featured a striptease stage with a pole dancing boudoir, it is believed.
The lair includes a 16-storey underground complex and bunker – built inside the cliff to withstand nuclear attacks.
Governor of Russia‘s southern Krasnodar region Veniamin Kondratyev said: “The death toll in (the village of) Arkhipo-Osipovka has risen to four following drone debris, with a further 10 people injured.
“On the governor’s instructions, a specialist disaster medicine team has been dispatched to the scene.
“Two adults and one child have been taken to hospital.”
It comes amid Ukraine’s renewed push to end the war with a crippling series of drone strikes deep inside Russia.
Kyiv has been targeting key infrastructure to suffocate Putin’s economy and paralyse things like trade and transport.
The country’s biggest e-commerce platform Wildberries – known as Russia’s Amazon – has suffered a series of crippling blitzes over recent weeks.
Since mid-July, Ukraine has struck around 20 sites belonging to Wildberries across various parts of Russia and annexed Crimea.
Russia analyst Natia Seskuria said to media: “It’s a very smart strategy from the Ukrainian side… it will have a significant impact on Russian households.
“This is something new and something that we haven’t seen before, but I think the message is still the same in terms of making the war extremely costly for Russia.”
Russia expert Mark Galeotti also claimed it was part of a wider campaign to bring the war home to ordinary Russians and make their lives harder.
“Frankly all across the country this did seem to be a war that was happening a long way away – and obviously things will change now,” he said.
The online marketplace also has been accused by Kyiv of housing military and drone equipment that is often sent to the frontline.
Last night, Ukraine unleashed what is believed to be its most intense bombing campaign of the war so far.
A total of 1,165 drones, bombs and missiles were shot down or destroyed by strained Russian defences.
In Belgorod, just 30 kilometres from Russia’s border with Ukraine, a drone factory was targeted by drones.
Footage shared online showed the factory erupting into an inferno.
One woman can be heard saying: “Everything’s on fire there, everything.
“It’s a disaster, that’s where they make drones and teach you how to fly them. It’s ****ed, it’s all blown up.”
Elsewhere, two major oil refineries, Saratov and Ufa, and a Wildberries base at Novosemeykino in Samara region were also hit.
Fuel trucks heading to Russia-controlled Crimea were also blown up.
Russian oil refining has been crippled by the strikes, slashing production by 150,000 barrels per day in the last month, according to Bloomberg.
In July, Moscow’s oil refining fell to 3.6million barrels per day – the lowest rate since 2002.
It also comes after a suicide bomber set off a homemade explosive device at an elite Moscow restaurant, killing five.
Top Putin warmonger Alexander Chayko, commander-in-chief of the Russian Aerospace Forces, cheated death during the explosion.
He was throwing his 55th birthday bash when the blast ripped through the luxury venue.
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Another 20 were wounded in the blast, which shook the foundations of the Stalinist high-rise in central Moscow‘s Kudrinskaya Square.
In response to the escalating tensions, Russia said this morning it was increasing protection for ships in the Azov-Black Sea basin while developing alternative cargo routes.