The new agreement will strengthen aviation links between the states, allowing Iranian domestic airlines to fly seven times a week between Tehran and Baghdad, as well as 14 flights a week from other Iranian airports to Najaf.
The deal also allows for seven cargo flights a week between the two capitals.
There has been no announcement revealing when flights will begin, or whether Iraqi Airways will also be able to fly to Iran.
The accord was signed in Tehran on 5 November by Hossein Khanlari, the head of Iran's air transport regulator, the Civil Aviation Organisation, and his Iraqi counterpart Sabah al-Sheybani.
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