The tactical missile, which is capable of evading jamming signals in electronic warfare, will come into service by March 2017, Xinhua news agency reported.
"Zolfaqar" runs on solid fuel and can hit the targets with a pin-point accuracy in a range of 750 km.
On Wednesday, Iran's Islamic Revolution Guards Corps demonstrated "Zolfaqar" during a military parade in the country's southern port of Bandar Abbas.
Iranian officials have vowed to develop missile programmes as a means to enhance deterrent power of the country.
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