The missile, named Blue Sparrow, is modeled on the Iranian Shahab-3 ballistic missile and will be used as a test target by the Israeli Arrow anti-missile complex.
The first interception with the use of the new rocket will be performed in a few months, the report said.
Earlier today a senior Iranian commander warned that his military will wipe Israel off the world map if the Zionists attack the Islamic Republic.
"We must defend our state borders, and should Israel take any hostile action, we are ready to eliminate Israel from the world scene," Deputy Commander-in-Chief Mohammad Reza Ashtiani said.
The Islamic republic has long been touting its progress in ballistic missiles and its Shahab-3 missile has a range of up to 2,000 kilometers (about 1,200 miles) making it capable of reaching Israel and southern Europe.
Some Western sources claim that Iran may be currently running a program, dubbed Project Koussar, to develop a totally different missile with a range of 4,000-5,000 km (2,500-3,300 miles).