Tehran agreed to sign the Additional Protocol to the Nuclear Non-Proliferation Treaty in a bid to persuade the world it is not secretly developing atomic weapons.
The signature comes nearly 18 months after an exiled Iranian opposition group sparked a crisis by saying Tehran was hiding several large nuclear facilities. The allegations proved to be true.
Iran's outgoing ambassador to the International Atomic Energy Agency (IAEA), Ali Akbar Salehi, said on Thursday that Tehran wanted to ensure every aspect of its nuclear programme was open to scrutiny.
"We will not leave any stone unturned," he said.
'Axis of evil'
Salehi and IAEA chief Muhammad al-Baradei signed the document at the agency's headquarters in Vienna.
"The protocol is a tool to build confidence and to provide assurances," al-Baradei said, adding he hoped Iran's parliament would ratify it as soon as possible.
US claims Iran's Bushehr nuclear
power reactor is for making arms
The United States has labelled Iran part of an "axis of evil" and says it is using its atomic energy programme as a smokescreen to develop nuclear arms. However, Tehran denies this.
The US ambassador to the IAEA called the signature a "step in the right direction" but that it would take years before the world could be sure Iran was meeting its obligations.
Another Western diplomat called the move "long overdue".
The protocol sparked heated debate in Iran earlier this year, with many saying the short-notice inspections it permits were tantamount to allowing spies into the country.
But, under mounting international pressure, Iran said in October it would sign up for the tougher inspection regime, suspend uranium enrichment, and provide full details of nuclear activities dating back to the 1980s.
Unlike the IAEA's UN Security Council mandate to conduct weapons inspections in pre-war Iraq, the protocol does not allow unannounced "anywhere and any time" inspections in Iran.
"The protocol is a tool to build confidence and to provide assurances"
But it does empower the agency to demand much more information about sensitive nuclear activities, and to inspect all declared and undeclared nuclear sites with as little as two hours' notice.
The IAEA criticised Tehran last month for an 18-year cover-up of potentially arms-related nuclear research, warning the Iranians any further breaches could see them taken to the Security Council for possible sanctions.