Iran and six major world powers reached deal on limiting Teheran's nuclear activity, capping years of negotiations.
US President Barack Obama said that with the deal, "every pathway to a nuclear weapon" was cut off for Iran.
His Iranian counterpart, Hassan Rouhani, said it opened a "new chapter" in Iran's relations with the world.
Under the deal, sanctions imposed by the United States, European Union and United Nations will be lifted in return for Iran agreeing long-term curbs on a nuclear programme that the West has suspected was aimed at creating a nuclear bomb.
Iran will mothball for at least a decade the majority of its centrifuges used to enrich uranium and sharply reduce its low-enriched uranium stockpile.
The deal reportedly gives UN nuclear inspectors extensive but not automatic access to sites within Iran.
Negotiations between Iran and six world powers - the US, UK, France, China, Russia and Germany - began in 2006.
The so-called P5+1 want Iran to scale back its sensitive nuclear activities to ensure that it cannot build a nuclear weapon.
Iran, which wants crippling international sanctions lifted, has always insisted that its nuclear work is peaceful.
Iranians took to the streets, honking car horns and flashing victory signs in celebration after the announcement a deal they hope will end years of sanctions and isolation.
The agreement is a political triumph for Mr Obama, who has long promised to reach out to historic enemies, and Iranian President Hassan Rouhani, elected two years ago on a vow to reduce the isolation of his nation.
Both face scepticism from powerful hardliners at home.
Mr Obama, who is trying to persuade a sceptical US Congress of the benefits, said it would oblige Iran to:
- remove two-thirds of installed centrifuges and store them under international supervision
- get rid of 98 percent of its enriched uranium
- accept that sanctions would be rapidly restored if the deal was violated
- permanently give the International Atomic Energy Agency (IAEA) access "where necessary when necessary"
'Significant step forward'
Shortly after reports of the deal emerged, IAEA head Yukiya Amano told reporters in Vienna that his organisation had signed a roadmap "for the clarification of past and present outstanding issues regarding Iran's nuclear programme".
He called the agreement a "significant step forward", saying it would allow the agency to "make an assessment of issues relating to possible military dimensions to Iran's nuclear programme by the end of 2015".
On Monday, Mr Rouhani tweeted that if there was a deal with world powers, it would be a "victory of diplomacy and mutual respect over outdated paradigm of exclusion and coercion. And this will be good beginning."
There has been stiff resistance to a deal from conservatives both in Iran and the US.
Israel's government has also warned against an agreement.
Following reports of a deal, Israeli Prime Minister Benjamin Netanyahu was quoted as saying that Iran would receive a "sure path to nuclear weapons" and "a cash bonanza of hundreds of billions of dollars".
-BBC / Reuters