British Foreign Secretary Philip Hammond is present at the ceremony marking the event, according to the BBC. Hammond has become the first top British diplomat to visit the Islamic Republic since 2003.
Arrived in #Tehran. First British Ministerial visit since 2003. Historic moment in UK-Iran relations.
— Philip Hammond (@PHammondMP) 23 августа 2015
Iran is expected to reopen it embassy in London at the same time.
The British embassy in the Iraqi capital was shut down in 2011 after it was stormed by protesters during a demonstration against London's anti-Iran sanctions.
The thaw in the relationship between the two countries comes after Iran and the six world powers — the United Kingdom among them — reached an agreement in July obliging Tehran to guarantee the peaceful nature of its nuclear activities in exchange for an easing of sanctions against the country.
