The president of the Central American country, himself a former rebel, also lent his support to Russia, which recognized the regions independence on August 26.
Nicaragua "recognizes the independence of South Ossetia and Abkhazia" decreed by their respective parliaments in August, Ortega said Tuesday evening during ceremonies for the 29th anniversary of the army, newspaper reports said.
Nicaragua also completely supports "the Russian government’s position, which seeks a dialogue with European countries to end this conflict," he added.
On Monday, European leaders decided to suspend talks with Moscow on a new EU-Russia partnership pact until Russian troops pull back to the positions they held before the outbreak of fighting in Georgia.
Russia sent tanks and troops into Georgia on August 8, a day after Tbilisi launched an offensive to regain control of breakaway South Ossetia.
Moscow halted its offensive after five days but refused to withdraw all its troops, saying they are on a peacekeeping mission. Georgia has labeled them an occupation force.
Ortega also slammed "political hegemonies" that he said were "trying to surround Russia" and investing millions of dollars through NATO to "build a military fence against Russia."
U.S. Vice President Dick Cheney said Wednesday that Washington had a "deep" interest in the ex-Soviet Caucasus, a key energy corridor he said must be developed.
Cheney, in the oil-rich former Soviet republic of Azerbaijan on Wednesday, was due to travel Thursday to Georgia for a meeting with beleaguered, US-backed President Mikheil Saakashvili.
The United States on Wednesday announced a one-billion-dollar (690-million-euro) aid package, which did not include any military assistance, to help Georgia recover from its war with Russia.
NATO meanwhile announced that its chief Jaap de Hoop Scheffer would visit Georgia on September 15-16 and could discuss aid for the country, in a visit planned before the conflict erupted.
Russia and Georgia meanwhile closed down diplomatic exchanges, though the parliament in Tbilisi formally lifted the state of war in most of the country that was declared when the hostilities broke out last month.