In a written statement released on Thursday, al-Sistani said an unelected Iraqi government due to take power after 30 June should have strictly limited powers and should focus on preparing for elections.
Al-Sistani's statement marked a further easing of his initial demand that elections should be held ahead of June 30 to select the Iraqi government that will take over power from the US-led administration occupying Iraq.
A United Nations delegation visited Iraq earlier this month to assess the feasibility of elections, and concluded that it would take at least eight months to get the country ready for polls.
Al-Sistani has repeatedly expressed his preference for control to be handed over by the occupation forces to a fully-elected Iraqi government, but he has been equally insistent that he will go along with the decision of the United Nations on the feasibility of an early election.
A report also said the UN is preparing to send an expert team back to Iraq within two weeks to help pave the way for elections.
No date for the visit was given, but UN officials said the team, led by Carina Perelli, head of the UN election unit, would leave before the second week of March to work out the steps needed to prepare for fully fledged polls.