British Foreign Secretary Philip Hammond has presided over the reopening of UK's embassy in Tehran, four years after it was trashed by a mob.
Hammond's visit on Sunday is the first by a British foreign secretary since 2003, as Tehran's ties warm with the West.
Hammond watched the British flag being raised in the garden of the opulent 19th century building while the national anthem played.
The British foreign secretary said the ceremony marked the start of a "long" and "exciting" journey, calling Iran an "important country in a strategically important but volatile region."
"Today's ceremony marks the end of one phase in the relationship between our two countries and the start of a new one - one that I believe offers the promise of better," he said.
"Last month’s historic nuclear agreement was another milestone, and showed the power of diplomacy, conducted in an atmosphere of mutual respect, to solve shared challenges.
"Re-opening the Embassy is the logical next step. To build confidence and trust between two great nations."
Hammond called the 2011 attack on the embassy a low point, but added relations had improved since the election of Iranian President Hassan Rouhani.
Iran's embassy in London also reopened around the same time, initially at charge d'affaires level, with a view to installing the two countries' respective ambassadors in the coming months.
Al Jazeera's Paul Brennan, reporting from London, said the re-opening of the embassies could pave the way for renewed economic ties between the two countries.
European officials have been quick to visit Tehran since July 14, when Iran struck a deal with Britain, China, France, Germany, Russia and the United States, ending a 13-year standoff over its nuclear programme.
The accord will see the lifting of economic sanctions imposed on Iran and has sparked a flurry of interest from countries seeking to reconnect with the oil-rich Islamic republic.
That thaw began with the June 2013 election of Iranian President Hassan Rouhani, a reputed moderate who reached out to the West.
Following the 2011 embassy attack, Britain said it could not have happened without the tacit consent of the Iranian regime at the time.
It erupted after a UK-led sanctions against Iran's banking sector.
Students rampaged for hours through Britain's diplomatic compounds in Tehran, tearing down the British flag, ripping up pictures of Queen Elizabeth II and trashing offices. Staff were seized by protesters.
Diplomatic relations were reduced to their lowest possible level, with Britain expelling Iran's officials.
|Security has been tightened outside the British Embassy on Sunday ahead of the visit of Hammond [Mohammad Ali Najib/Al Jazeera]
Britain's opulent 19th Century embassy in Tehran - built as a symbol of imperial might when Britain was locked into the 'Great Game' struggle for influence with swiftly expanding Tsarist Russia - has long been the subject of intrigue.
Following the 2011 storming, which was a protest against nuclear-related sanctions imposed by London, Iranian Supreme Leader Ayatollah Ali Khamenei called it an "evil embassy".
"Reopening our embassies is a key step to improved bilateral relations," said Hammond.
"In the first instance, we will want to ensure that the nuclear agreement is a success, including by encouraging trade and investment once sanctions are lifted."
He said London and Tehran should also be ready to discuss challenges including terrorism, regional stability, and the spread of the Islamic State of Iraq and the Levant (ISIL).
Hammond was also accompanied by treasury minister Damian Hinds and a small trade delegation for the two-day visit starting Sunday.
Hammond is following in the footsteps of his Italian, French and German counterparts who travelled to Iran with business delegations.
In an interview with Al Jazeera, Iranian political analyst Ghanbar Naderi said Hammond's visit is "a great day" for Iran.
"It means that diplomacy is working. There is no limit about what these countries can do."
|Hammond's visit on Sunday is the first by a British foreign secretary since 2003, as Tehran's ties warm with the West. [Mohammad Ali Najib/Al Jazeera]
|The election of President Hassan Rouhani in 2013 paved the way for the thawing of ties between Iran and the UK [Mohammad Ali Najib/Al Jazeera]
Source: Al Jazeera and agencies