Iran has agreed to provide international observers access to its nuclear sites in exchange of lifting of certain sanctions.
However, the country will have a right to challenge such requests of inspection.
The deal signed by Iran and the US, UK, France, China, Russia and Germany will allow Iran to keep its nuclear material for ten years.
Iranian Foreign Minister Mohammad Javad Zarif was quoted by the Associated Press as saying: "This is a historic moment.
"We are reaching an agreement that is not perfect for anybody, but it is what we could accomplish, and it is an important achievement for all of us. Today could have been the end of hope on this issue. But now we are starting a new chapter of hope."
UN arms embargo on Iran will continue to stay for five more years, but could be removed if the International Atomic Energy Agency (IAEA) certifies that the country is not undertaking any activity on developing nuclear weapons.
Sanctions on the transfer of ballistic missile technology will stay for eight more years.
In a related development, the IAEA signed a roadmap to address past and present outstanding issues regarding Iran’s nuclear program.
IAEA director general Yukiya Amano said: "The road-map sets out a process, under the November 2013 Framework for Cooperation, to enable the Agency, with the cooperation of Iran, to make an assessment of issues relating to possible military dimensions to Iran’s nuclear program by the end of 2015.
"It sets out a clear sequence of activities over the coming months, including the provision by Iran of explanations regarding outstanding issues. It provides for technical expert meetings, technical measures and discussions."
The Middle-Eastern country is expected to benefit from the agreement, with access to more than $100bn in assets frozen overseas. It can also hope to have oil deals with European countries.
Image: IAEA director general Yukiya Amano and Iran Vice-President Ali Akhbar Salehi signing a roadmap in Vienna on Tuesday. Photo: courtesy of D.Calma / IAEA.
