Iran's oil ministry said on Sunday a five-billion-dollar oil payments dispute with India has been resolved without any interruption of crude exports.
"Following bilateral negotiations, the two sides agreed to settle the outstanding bills as soon as possible," National Iranian Oil Company (NIOC) managing director Ahmad Ghalebani told the ministry's website SHANA.
"Part of the arrears will be paid in the next few days and the remaining part will be paid by the Indian customers gradually," he said.
Ghalebani said "oil exports to India are continuing" as usual, without giving details.
Tehran warned late last month it would halt exports to India from next month unless the payments dispute was resolved.
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Indian Oil Minister S. Jaipal Reddy said on Friday that New Delhi expects to pay via Turkey its first tranche of arrears to Iran, which supplies 12 percent of energy-hungry India's crude oil needs.
India is Iran's second largest client after China, and absorbs about 20 percent of the Islamic republic's crude exports.
However, Indian firms have been struggling for more than six months to pay Tehran because of international banking sanctions imposed on Tehran over its controversial programme of uranium enrichment.
Iran has been slapped by six UN Security Council resolutions, including four backed by sanctions, condemning its nuclear programme that the major powers and the International Atomic Energy Agency (IAEA) suspect has a military dimension, despite repeated denials from Tehran.
The United States has also slapped its own unilateral sanctions on Iranian banks, posing risks for foreign companies that deal with them.
Annual trade between India and Iran stands at an estimated $12 billion, with India buying about 400,000 barrels of Iranian crude per day.