Iran returned a Russian-built Project 877 class (NATO Kilo) diesel-electric submarine to the waters of the Persian Gulf on Tuesday following a refit, IRNA news agency reported.
The refitted boat, the Tareq, was relaunched at the port of Bandar Abbas. Iran has three Project 877 boats bought from Russia in the 1990s.
"Iranian engineers have repaired the boat's radars, pneumatic and compressor systems, pumps, engines, telecommunications and other systems," Vice Admiral Abbas Zamini, who oversaw the refit, told Iranian TV.
Iran had to conduct the refit itself after the manufacturer nation declined to carry out the work, he said.
Iran also lauched a new indigenously-designed frigate, the Sahand, at Bandar Abbas on Tuesday, IRNA reported.
The vessel launches come at a time of increased tension in the region, with the United States and other western powers deploying large numbers of naval vessels to the region and Israeli politicians making increasingly strident warnings over Iran's nuclear program.
Last week, Israeli Prime Minister Benyamin Netanyahu said world powers must set a deadline for stopping Iran's nuclear program or accept Israel had a right to strike.
Iran maintains its nuclear program is purely peaceful and is not a covert weapons project. It has threatened to close the Straits of Hormuz at the end of the Persian Gulf in response to any attack from outside. The straits are the export route for around 25 percent of the world's crude oil.
Naval experts contacted by RIA Novosti last year said Iran's Kilo class submarines would be a major worry for western navies trying to counter them, as they are hard to detect and can deploy mines and torpedos.