Tehran has also urged the German and Irish governments to take the same tough line.
Iranian officials on Wednesday said the kidnappers had demanded $6.1 million for the three Europeans seized on 2 December 2 near the city of Zahedan, capital of Sistan-Baluchestan province.
The region is close to Iran's borders with Pakistan and Afghanistan.
Asked by reporters whether Iran had any intention of paying, Interior Minister Abd al-Wahid Musavi-Lari replied: "Not at all".
Intelligence Minister Ali Yunesi similarly urged Berlin and Dublin not to "give any concession or money to the bandits and smugglers for the release of hostages".
"Sooner or later the smugglers have to hand over the tourists to the officials," the official IRNA news agency quoted him as saying.
German tourists holidaying in remote locations have been involved in several kidnappings in recent years, including Algeria, Egypt and Colombia.
Rumours that Germany paid ransoms for the hostages' release led to some concern that German tourists may be seen as lucrative targets by potential kidnappers.
"Sooner or later the smugglers have to hand over the tourists to the officials"
The German government routinely declines to comment on whether it has paid ransoms to kidnappers.
Deputy Interior Minister Aliasghar Ahmadi said recent drug seizures had left the traffickers strapped for cash. "This is the price we pay for the war on drugs," he said.
Ahmadi said telephone calls from the kidnappers could have come from abroad, suggesting a cross-border gangster network.
Drug-runners use Iran's porous eastern borders to traffic opium and heroin along the transit route to Europe.
Security officials say border skirmishes have killed 17 guards and 28 smugglers on the border in the last eight months.
The Irish Foreign Ministry on Wednesday confirmed the kidnapped Irish cyclist was Aidan James Leahy and said it was in contact with his family. It gave no further details.
The German Foreign Ministry has declined to reveal the names of the two Germans involved.