The move has complicated talks aimed at reviving Iran's nuclear deal with major powers as it is a big step towards producing weapons-grade uranium.

“The Agency today verified that Iran had begun the production of UF6 enriched up to 60% at the (above-ground) Natanz Pilot Fuel Enrichment Plant,” the International Atomic Energy Agency said in a statement.

UF6 is uranium hexafluoride, the form in which uranium is fed into centrifuges IR-4 and IR-6 for enrichment.

Earlier, Iran informed the IAEA of its intention to start enriching uranium at 60% purity.

The decision to increase uranium enrichment and install modern centrifuges at the Natanz nuclear facility comes as Tehran and a group of world powers are looking to save the 2015 nuclear deal in danger of a possible breakdown.