"The Arak heavy water production plant will become operational in the near future," Atomic Energy Organization deputy head Mohammad Saeedi was quoted as saying.
He said it would make Iran one of nine countries that have heavy water plants.
In February, the International Atomic Energy Agency asked Iran to reconsider its plans to work on a heavy water research reactor at Arak, a demand reiterated in a UN Security Council resolution of July 31.
The research reactor, 250 kilometers (150 miles) south of Tehran, is due to be completed in 2009. It could produce plutonium and the West fears it could be used to make nuclear bombs, as neighboring Pakistan has done.