Bosnian Serbs on Wednesday erected a 5.5-meter high monument on a hill in the eastern town of Visegrad to honor the foreign fighters.
According to Republika Srpska -- the Bosnian Serb entity of Bosnia-Herzegovina -- 37 Russian mercenaries were killed in the war, seven of them in Visegrad.
The Association of Victims and Witnesses of Genocide and the Movement of Mothers of Srebrenica and Zepa Enclaves strongly condemned the act.
"All those who are together with the Republika Srpska army were on the same side and carry the label of a perpetrator of genocide in Bosnia-Herzegovina,” the groups said in a joint statement.
“This ceremony rewarded the … volunteers who were killing innocent victims in Visegrad, and sends a clear message that coexistence is impossible," it added.
Victims' groups believe Bosniak and Croatian representatives should launch an initiative to remove the memorial from Visegrad.
The Association of Concentration Camp-Detainees of Bosnia and Herzegovina also condemned the memorial but said it was “not surprised”.
The town of Visegrad witnessed atrocities during the war, committed by Serb forces.
In June 27, 1992, Bosnian Serb militias forced some 70 Bosnian Muslims, including women and children, into a house before locking the doors and setting the structure ablaze.
Those who tried to escape the fire through the windows were shot.
Many of those thought to be involved in the massacre have never been brought to trial.