The new weapon has double the range of other missiles, with chiefs vowing to increase Iran’s missile power “every day” as long as the country continues to be threatened.
Iranian Defence Minister Amir Hatami described the missile as “100-percent domestically made. It is agile, stealth, tactical and precision-guided”.
The missile’s newest range is predicted to be 186 to 310 miles (300-500 kilometres), according to local journalist Mahdi Bakhtiari.
Previous versions of this missile had a range of 124 to 186 miles (200-300 kilometres), according to the US-based Centre for Strategic and International Studies.
In a thinly veiled threat to US President Donald Trump, Mr Hatami told conservative news agency Tasnim: “As promised to our dear people, we will not spare any effort to increase the missile capabilities of the country and we will certainly increase our missile power every day.
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“Be sure that the greater the pressures and psychological warfare against the great nation of Iran, our will to enhance our defence power in all fields will increase.”
The State Broadcaster IRIB reported that the new missile called “Fateh-mobin” had already “successfully passed its tests” and had the ability to strike targets on land and sea.
US officials told US broadcasters Fox News that a missile was test-fired by Iran during naval exercises last week in the Strait of Hormoz.
A US general described the exercises as Iran’s way of sending a message.
President Donald Trump pulled out the 2015 nuclear deal with Iran and world powers in May.
It comes as United States’ Ambassador to the United Kingdom has labelled Britain the US’ “closest ally” and urged the UK to stand with America over its stance on Iran after Donald Trump terminated the 2015 nuclear agreement.
Woody Johnson wrote for the Sunday Telegraph: “We are asking global Britain to use its considerable diplomatic power and influence and join us as we lead a concerted global effort towards a genuinely comprehensive agreement.
“Together, we can help bring about the peace and prosperity in Iran that the whole world wants to see.”
His comments come after the first phase on new sanctions the US were imposed on Iran on August 7. These included limits on the automation industry as well as gold and precious metals.
A second phase of sanctions are due to be introduced on November 7 which will include Iran’s oil exports.
Mr Johnson has said America wants the UK supporting them as they aim to force Iran to change the way the country is run.
However, he said the US will not resume commercial and diplomatic relations until “tangible and sustained changes” are made so that Iran behaves like a “normal country”.