The Iranian cabinet has passed legislation forbidding the creation of new government posts in Tehran and instructing other employees to relocate, RFE/RL's Radio Farda reports.
The law, passed on July 21, requires government departments to transfer some of their employees to locations outside Tehran by the end of August.
Officials say the law is aimed at "reducing Tehran's population," which currently stands at some 14 million people. The legislation has been a priority for the government of President Mahmud Ahmadinejad.
Opposition activists fear the law is an attempt to weaken Tehran's strong role in national political life. The capital has been the center of opposition activity in Iran, particularly for the Green Movement formed after last year's controversial presidential election.
The new law has led to objections by employees at the Cultural Heritage and Tourism Department, which was among the first departments to announce the transfer of some of its employees to places outside of Tehran.
Employees of the department gathered on July 20 in front of Iran's parliament to protest their "forced transfer." Demonstrators said the department may transfer over 1,000 of its workers to cities like Isfahan and Shiraz.
Cultural Heritage and Tourism Department head Hamid Baghaei had promised employees a pay raise if they transfer from Tehran, Iran's semi-official Fars news agency reported on July 20.
Baghaei also offered half-price airfares, housing loans, and other concessions to workers who agree to relocate.
Baghaei said, "There is no compulsion for employees to transfer [to another city] -- anyone may volunteer, or refuse," Fars reported.
He did not say whether there would be professional consequences for those who refuse to relocate.