UPDATE 2-Deripaska to buy back 17 pct of Strabag

* Deripaska agrees to buy back 17 pct stake for 373 mln eur

* Option for remaining 8 pct stake extended until 2014

* Strabag says to take stake in Deripaska company

(Adds Strabag to take stake in Deripaska company)

FRANKFURT, Nov 8 (Reuters) - Russian tycoon Oleg Deripaska agreed to buy back a 17 percent stake in Austrian construction firm Strabag STRV.VI for 373 million euros ($524 million).

Strabag shareholders agreed to extend Deripaska’s option to buy back another 8 percent of shares in the Austrian builder until 2014, Strabag and Deripaska’s unit Basic Elements said in a joint statement on Monday.

“We view our involvement with Strabag as a long-term strategic investment, a real partnership which stands to enhance the company’s position to the benefit of all of its shareholders,” said Andrei Elinson, deputy chief executive of Basic Element, in the statement.

In a separate statement, Strabag said it would make an advance payment of 70 million euros for a 26 percent stake in a Basic Element company, Russian road construction firm Transstroy.

It said it would take time for a “thorough due diligence” of Transstroy before agreeing on a definitive purchase price.

“Russia already shows first signs of a recovery from the financial and economic crisis. I am convinced of the strong market potential there,” said Strabag Chief Executive Officer Hans Peter Haselsteiner.

In addition, Strabag said it would sign a tentative agreement later on Monday with another Basic Element construction company, Glavstroy, regarding the construction of the Olympic village in Sochi, Russia.

Under the memorandum of understanding, Strabag would build residences and hotels ahead of the 2014 winter Olympics, it said.

Deripaska, who flourished as a commodity trader in the chaos that followed the fall of the Soviet Union, fell from the top of Russia’s rich list during the credit crisis.

His stake in emerging Europe’s biggest builder, partly debt-financed when bought for around 1 billion euros ($1.4 billion) in 2007, was taken over by other shareholders in 2009 when Deripaska retained an option to buy it back. (Reporting by Maria Sheahan and Eva Komarek; editing by Louise Heavens)