A file photo taken on February 2, 2019, shows Iranians visiting a weaponry and military equipment exhibition in the capital Tehran
As Tehran celebrated, however, Washington argued that arms sales to Iran would still violate UN resolutions and threatened sanctions on anyone making such sales.
Iran has hailed the expiry as a diplomatic victory over its arch enemy the US, leaving the way open to purchase weapons from Russia, China and elsewhere.
"As of today, all restrictions on the transfer of arms, related activities and financial services to and from the Islamic Republic of Iran... are all automatically terminated," Iran's foreign ministry said in a statement.
The embargo on the sale of conventional arms to Iran was due to start expiring progressively from October 18 under the terms of the UN resolution that confirmed the 2015 nuclear deal between Tehran and world powers.
"As of today, the Islamic Republic may procure any necessary arms and equipment from any source without any legal restrictions, and solely based on its defensive needs," the ministry added in the statement on Twitter.
It insisted that under the terms of the nuclear deal, struck with the United States, China, Britain, France, Germany and Russia, "the lifting of arms restrictions and the travel ban were designed to be automatic with no other action required".
US President Donald Trump withdrew his country from the nuclear deal in 2018 and has unilaterally begun reimposing sanctions on Iran.
- Pompeo warns of sanctions -
On Sunday, Secretary of State Mike Pompeo contended that arms sales to Iran would breach UN resolutions and still result in sanctions.
"The United States is prepared to use its domestic authorities to sanction any individual or entity that materially contributes to the supply, sale, or transfer of conventional arms to or from Iran," Pompeo said in a statement.
Comment: Pompeo further said:
"The United States is prepared to use its domestic authorities to sanction any individual or entity that materially contributes to the supply, sale, or transfer of conventional arms to or from Iran, as well as those who provide technical training, financial support, and services, and other assistance related to these arms,"
Washington suffered a setback in August when it failed to win support from the United Nations Security Council to indefinitely extend the arms embargo.
It was "a momentous day for the international community," the Iranian ministry said Sunday, adding the world had stood with Tehran "in defiance of the US regime's efforts".
But it stressed that "unconventional arms, weapons of mass destruction and a buying spree of conventional arms have no place in Iran's defense doctrine".
Despite pulling out of the nuclear deal, the Trump administration insists it is still a "participant" and can therefore go ahead with reimposing sanctions.
But the US legal argument has been rejected by almost the entire Security Council, with European allies of the United States saying the priority is to salvage a peaceful solution to Iran's nuclear programme.
Iran urged the US to "abandon its destructive approach vis-a-vis Resolution 2231", adding that American attempts to "violate" the resolution had been "categorically rejected several times in the past three months by the Security Council".
In case of measures amounting to a "material breach of the resolution and the purposes" of the deal, Iran reserved "the right to take any necessary countermeasures to secure its national interests".
Moscow said in September that it was ready to boost military cooperation with Tehran, while Beijing has also spoken of its willingness to sell arms to Iran after October 18.
Washington maintained it will seek to prevent Iran from purchasing Chinese tanks and Russian air defence systems.
Iranian Foreign Minister Mohammad Javad Zarif said in a tweet that the international community had "protected" the nuclear deal and Sunday marked the "normalisation of Iran's defence cooperation with the world".
The defence minister of Israel, Iran's other arch foe, Benny Gantz wrote that "with the expiration of the arms embargo on Iran today, we must be stronger and more determined than ever".
"Iran has never been an Israeli problem, but, first and foremost, a global and regional problem," he wrote on Twitter.
He vowed to "continue to take whatever measures necessary, together with our partners, old and new, to prevent Iranian expansion and armament".
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The Pentagon is so preoccupied with creating spin that it appears that no thought goes into actual foreign policy.