Anybody who works for - or is a proxy of - the Iranian state will have to register their presence in the UK or face jail time.
Security minister Dan Jarvis said Iran, including its IRGC intelligence services and the Ministry of Intelligence and Security, is being placed on the "enhanced tier" of the Foreign Influence Registration Scheme (FIRS).
That means any members of the Iranian state, or anybody acting on behalf of the state, carrying out "political influence activities" in the UK will have to register themselves.
Failure to register is a criminal offence and can mean five years in jail.
Iran is the first foreign power to be placed on the enhanced tier of the scheme, which has two levels aimed at strengthening the resilience of the UK's political system against covert foreign influence.
The first level is a "political influence" tier, involving communications with senior decision makers such as UK ministers, MPs and senior civil servants.
Mr Jarvis said the scheme, which he called "a critical disruptive tool for the UK", will be up and running by the summer.
In October, the head of MI5 revealed the security service had foiled 20 Iran-backed plots in the UK since the beginning of 2022.
Mr Jarvis said the Iranian state has been targeting Jewish and Israeli people in the UK, as well as UK-based Persian-language media critical of Iran.
The minister said Iran is trying to "stifle criticism through intimidation and fear".
"These threats are unacceptable," he said.
"They must and will be defended against at every turn."
He added threats from Iran are not just physical in nature, with the National Cyber Security Centre seeing "malicious" cyber activity conducted by Iranian state-affiliated actors targeting the UK.
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