A top Iranian environment official said on Monday Tehran and Baghdad will jointly pay $1.2 billion in a project to reduce the number of sand dunes in a bid to cut the number of sandstorms from Iraq.
"In order to reduce gravel levels we have signed an agreement with a foreign company worth $1.2 billion to cover a million hectares (2.47 million acres) of Iraqi soil in the next five years," the official IRNA news agency quoted the head of Iran's Environmental Protection Organisation as saying.
The name of the foreign firm was not given.
"This initiative began with 500 hectares and in our negotiations (with Iraq) it was decided to either use fossil materials (petroleum products) or biological ones to stabilise the dunes," Mohammad Javad Mohammadi-Zadeh added.
Media and some local officials have blamed sandstorms on countries west of the Islamic republic, particularly Iraq which has been hit by desertification and deforestation because of dam construction and declining agriculture.
In mid-April, 20 of Iran's 31 provinces had to close schools and government offices, and flights to and from some western cities were cancelled because of sandstorms mostly originating in neighbouring Iraq.
The problem of sandstorms from Iraq has been blamed on two decades of on-off wars, with officials there saying the number of palm trees has fallen by two thirds from around 36 million to just 12 million.
In September 2010, Iran, Iraq, Syria, Qatar and Turkey signed an accord in Tehran aimed at tackling the sandstorms problem over the next five years.
Explore further: Oil from Russian trawler wreck reaches Canaries' beaches