The World Trade Organisation has agreed to allow Iran to begin membership talks after the US lifted its opposition to Tehran joining the body.
Tehran denies that it is seeking to develop nuclear weapons
The move comes a day after Iran agreed a deal with European countries to maintain its suspension of nuclear activities and continue talks.
The US said in March it would drop its decade-long block on Iran to help those negotiations.
Iran applied to join the 148-member trade group in September 1996.
Following the WTO decision, Mohammad Reza Alborzi, Iran's ambassador to the United Nations in Geneva, was immediately invited to attend the WTO's General Council meeting, according to Reuters news agency.
"It was long overdue. I think it was positive," Mr Alborzi told Reuters after the meeting. "It will open new doors to trade co-operation."
However, WTO officials have told the BBC they cannot say how long it will take for Iran, a major oil exporter, to become a member.
Accession can take many years - Russia is still negotiating its entry after 10 years of talks.
The WTO deals with the rules of trade between nations and it aims to help producers of goods and services, exporters, and importers conduct their business.
"The Iranian foreign ministry welcomes this step. We believed from the beginning that our right to be accepted into the WTO was ignored for no reason," Iran foreign ministry spokesman Hamid Reza Asefi told AFP.
Iran is major oil exporter
"In the past months the Islamic Republic of Iran, in its negotiations with Europe and influential WTO countries, has stressed the need to recognise Iran's right to join this trade organisation," Mr Asefi added.
President George W Bush announced a major change in US policy towards Iran in March, saying that he would back European talks to resolve the stand-off over Iran's nuclear activities and was prepared to extend economic incentives to Tehran.
These included the lifting of the block on Iran's WTO membership and of objections to Tehran obtaining parts for commercial planes.
Washington accuses Iran of using its nuclear energy programme as a cover for developing nuclear weapons.
Tehran denies seeking nuclear weapons, but suspended uranium enrichment after negotiations with France, Germany and the UK.
On Wednesday Iran renewed the pledge to maintain the suspension in a deal announced by UK Foreign Secretary Jack Straw.