But an aerospace official says it is just for scientific research and not a missile capable of reaching space, as earlier reported on Iranian State television.
The executive deputy of Iran’s aerospace research centre, told Fars News Agency the rocket would not stay in orbit, but could rise to about 150km into the atmosphere before falling to earth by parachute.
The launch comes at a time of mounting tension between Tehran and the West over Iran’s controversial nuclear programme.
UN security council members are due to meet to discuss the possibility of more sanctions over the nuclear issue.
On Sunday, President Mahmoud Ahmadinejad repeated there was no going back on Iran’s nuclear programme.
He said Iran had obtained the technology to produce nuclear fuel and its program was now like a train “which has no brake and no reverse gear.”
Iran says it is seeking nuclear power only for peaceful purposes.