The 'Museum of Power' art gallery had the painting on display showing Vladimir Putin in a slip dress combing the hair of Dmitry Medvedev, who is shown wearing a bra.
According to Fox News, authorities said that the satirical piece had broken unspecified laws.
A Russian law against insulting authorities carries a one-year prison term for some offenders.
Gallery staff said that the police also removed a painting that depicted the head of the Russian Orthodox Church covered in tattoos and others that poked fun at Russian lawmakers who backed anti-gay laws.
The art gallery was shut down and its owner, Alexander Donskoy, called the police's actions as amounting to illegal seizure, the report added.
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