The British embassy in Tehran was reopened by the country's foreign secretary Philip Hammond on Sunday, nearly four years after it was closed following an attack by hardliners, Iranian state TV reported.
Hammond arrived in Tehran on Sunday to attend the reopening ceremony and to hold talks with Iranian officials. The trip marked the first time a British foreign secretary has visited Tehran since 2003.
Britain has had no diplomatic presence in Tehran since hard-liners protesting the imposition of international sanctions stormed it in November 2011, but the election of President Hassan Rouhani and the recent nuclear deal between Iran and world powers have brought about a significant diplomatic thaw.
The Iranian embassy in London was also set to reopen on Sunday.
"Four years on from an attack on the British embassy, I am today re-opening it," Hammond said in a prepared statement. "Our relationship has improved since 2011. President Rouhani's election and last month's nuclear agreement were important milestones. I believe that we have the potential to go much further."
Terrorism, regional stability and the spread of the Islamic State group in Syria and Iraq are among the challenges Britain and Iran should be prepared to work together on, Hammond said.
"This move does not mean that we agree on everything. But it is right that Britain and Iran should have a presence in each other's countries. The role of embassies is to build cooperation where we agree and to reduce our differences where we don't," he said.
Hammond and the new British charge d'affaires, Ajay Sharma, were attending the embassy reopening ceremony together with representatives of the Iranian Ministry of Foreign Affairs, the Foreign Office said.
Hammond was also accompanied by a small British trade delegation to discuss possible future trade opportunities following last month's nuclear deal, the ministry added.
The British embassy would initially be staffed by a small number of staff with limited consular services, but officials expect to upgrade its leadership to full ambassador status in coming months.