"This agreement was reached at a bilateral meeting between (deputy foreign minister) Mohammad Takht Ravanchi and his British counterpart, Simon Gass," on the sidelines of nuclear negotiations in Geneva, IRNA said.
"An announcement will be made soon," the Foreign Office in London told AFP.
Britain ordered the closure of Iran's embassy in London after closing its own in Tehran following the storming of the compound by hundreds of angry Islamist students in November 2011.
They were protesting at Western sanctions against Tehran over its disputed nuclear drive, and ransacked the building as well as the British ambassador's residence in north Tehran.
However, after the surprise victory in June elections of moderate cleric Hassan Rouhani as Iranian president with a pledge to engage the world constructively, London and Tehran have been working towards restoring ties.
The two sides agreed in October to assign non-resident charge d'affaires, a diplomatic post that is one level below ambassador.
As it stand now, Oman represents Iranian interests in Britain, while Sweden has taken on similar responsibilities in Tehran.
Britain's Foreign Secretary William Hague met with Iranian Foreign Minister Mohammad Javad Zarif twice on the sidelines of the UN General Assembly in New York last month.
"I've made very clear to Mr Zarif that we are open to more direct contact and further improvements in our bilateral relations," Hague said, referring to a telephone conversation with him on October 7.
"We have therefore agreed that both our countries will now appoint a non-resident charge d'affaires tasked with implementing the building of relations, including interim steps on the way towards the eventual reopening of both our embassies."
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