Canada says it will freeze all trade with Iran over Tehran's nuclear program and human rights record.
The announcement was made by Canada's Foreign Minister John Baird.
He said Ottawa was particularly concerned by the failure of the United Nations' nuclear agency this month to persuade Iran to let it resume a probe into suspected nuclear weapons research.
In September, Canada suspended diplomatic ties with Tehran, calling Iran the biggest threat to global security.
Canada had already imposed a series of trade sanctions on Iran.
In 2012, bilateral trade was worth around $130 million.
Based on reporting by Reuters and AFP