Russia has lifted its ban on the sale of the S-300 air defence missile system, which would enhance Tehran's capability to defend itself from air strikes.
Russia' president Vladimir Putin gave the go-ahead for the sale, after it was suspended in 2010 when the UN imposed sanctions on Iran over its nuclear programme.
Israel and the US expressed concern at the news, which comes soon after a framework agreement on Iran's nuclear future was reached with the international community.
"This is a direct result of the legitimacy that Iran obtained from the emerging nuclear deal,'' said Israel's Intelligence Minister Yuval Steinitz.
But Russia's Foreign Minister Lavrov said the missiles were "entirely defensive", and were of no security threat to any country.
US Secretary of State John Kerry is said to have raised concerns with Mr Lavrov about the announcement, White House spokesman Josh Earnest said.
The $800m (£545m) contract to deliver the system was criticised in 2010 by both the US and Israel, who thought it could be used to protect nuclear sites from air strikes.
No guarantee of final nuclear deal – Ayatollah Khamenei (09 April 2015)