The UN Security Council has voted to impose the first ever UN sanctions on Iran, in response to Tehran's refusal to halt its nuclear programme.
Iran said the move would not be an impediment to its nuclear progress.
A Foreign Ministry spokesman claimed the resolution was an illegal measure that was outside the jurisdiction of the UNSC.
In a resolution adopted unanimously, the 15-member council directed all states 'to prevent the supply, sale or transfer' of all items, materials, equipment, goods and technology which could contribute to Iran's nuclear and ballistic missile programs.
It also mandated that 'all states shall freeze the funds, other financial assets and economic resources' owned by people or entities linked to Iran's nuclear programme.
Russia's UN ambassador Vitaly Churkin, who worked hard to soften the resolution, made it clear that the sanctions would be lifted if Iran complied with demands of the council and the international Atomic Energy Agency.
The European text was amended several times, notably to overcome Russian objections, as Moscow and Beijing, which have close economic and energy ties with Tehran, deemed it too tough.
US acting Ambassador Alejandro Wolff said the UNSC expected Iran's full, unconditional and immediate compliance with the resolution.
Mr Wolff also warned of further action if Iran did not comply.
The text, drawn up by Britain, France and Germany, requires Iran to suspend all enrichment-related and reprocessing activities, including research and development as well as all heavy water-related projects.