The European Union (EU) is all set to impose its "toughest ever" package of economic sanctions on Iran, a media report said on Friday.
Legally binding measures to be agreed on Monday will go far beyond existing UN measures against Iran's nuclear programme, The Daily Telegraph reported.
Officials said the impact of the measure would be to starve key companies and banks of access to the European market. Significant levels of trade with Germany and Italian would be cut off.
The measures reinforces a UN sanctions resolution passed in June.
"I think the Iranians will be surprised by the extent of the measures," a European diplomat said. "These measures go significantly beyond the scope of the resolution."
Iran's energy industry will be "hit hard" by a total European prohibition on all investment, sale of equipment and investment in refining and liquid natural gas production, the report said.
New banking measures will require all Iranian banks, or financial institutions connected with Iran, to get prior notification of all transactions over 8,400 pounds and authorisation for any transfers over 33,600 pounds.
Besides, a "very significant" extended travel ban and asset freeze list, covering over 40 Iranian firms and officials, will be published Tuesday. All Iranian air cargo flights, in and out of the EU, will also be banned.
A ban on EU exports of "dual use" technologies will be extended from nuclear applications to cover all conventional military applications and chemical weapons.
"This is the most far reaching, autonomous package of sanctions that the EU has ever agreed," said another diplomat.
The move reflects new political will in Germany, France and Holland who all have a significant economic interests in Iran.
The US has also imposed penalties for trading with Iran but officials hope that the EU package will be emulated by third countries.
"We hope this leads to other countries around the world who want themselves to go beyond the UN sanctions imposing similar measures," the diplomat said. "Very few countries want to go as far as the US. It will be the EU package that is the model."
The EU measures have been agreed less than two months since the UN passed global sanctions, a significant improvement on the six months it took to negotiate a previous set of sanctions.