Iranian officials say uranium enrichment at the country's two nuclear facilities has been halted in accordance with an international agreement.
In line with the interim agreement and after confirmation by the International Atomic Energy Agency (IAEA), the European Union and the United States are suspending a range of economic sanctions against Iran.
The moves will ease restrictions on Iran's trade of petrochemicals and precious metals, as well as insurance regulations for oil shipments.
An EU statement said the sanctions would be halted for at least six months as part of the deal, which was reached in November between Iran and six world powers.
"I am pleased to say that Iran has implemented the nuclear-related measure set out in the agreement and we have adopted the necessary legislation to suspend certain sanctions for a period of six months," EU foreign policy chief Catherine Ashton said of the decision, after an EU Foreign Affairs Council meeting in Brussels. "The suspension of these sanctions will enter into force today."
The White House confirmed the United States would also begin easing restrictions on Iran in line with the agreement. White House spokesman Jay Carney called Iran's actions "an important step forward."
The head of Iran's Atomic Energy Organization, Ali Akbar Salehi, said earlier in the day that centrifuges at the Natanz and Fordow nuclear facilities were being disconnected and the process of enrichment of uranium to 20 percent would stop.
"Today in the technical briefing the IAEA briefed the members in detail [about] the implementation of the measures already started by Iran and the agency is going to update the members regularly," Iran's ambassador to the UN'S International Atomic Energy Agency (IAEA), Reza Najafi, said in Vienna. "We hope that it will be a good start to pave the way for negotiations on the comprehensive and long term solution [to be agreed] by Iran and the group of P5+1."
IAEA Deputy Director Tero Varjoranta verified Iran's nuclear actions, saying, "They have stopped producing the 20 percent uranium; they also ceased to use the tandem configuration of the centrifuges -- in other words, the interconnections have been removed from the place. The delusion process of the 20 percent uranium has started and the conversion process of the uranium is also ongoing. These are a couple of major examples of the story."
State Department spokeswoman Jen Psaki said the actions would allow for talks on a long-term deal to contain Iran's nuclear program.
Ashton was optimistic about the next round of negotiations needed for such a deal.
"We should use the momentum we got and try and deal with this issue properly, fully, comprehensively, and do it in good time and we will take the time we need in order to achieve that," Ashton said.
But Israeli Prime Minister Benjamin Netanyahu said the agreement "does not prevent Iran from implementing its intentions of obtaining a nuclear weapon."
He added that any final agreement on Iran's nuclear program "must remove the Iranian nuclear train from the tracks.
Iran struck the deal on November 24 with the so-called P5+1 countries -- Britain, China, France, Germany, Russia and the United States -- at a conference in Geneva.
During the next six months, Iran has pledged to not install or switch on new nuclear machinery and to allow the IAEA daily visits to the Natanz and Fordow facilities.
Based on reporting by AFP, Reuters, and AP