The Iran government has banned all imports of products made in Saudi Arabia, Iranian student news agency ISNA reported.
The decision was made in a cabinet meeting chaired by President Hassan Rouhani on Thursday, it said.
Saudi Arabia has broken off diplomatic ties with Iran, amid a row over the Saudi execution of a prominent Shia Muslim cleric.
Iran is Saudi Arabia's main regional rival - they back opposing sides in the conflicts in Syria and Yemen.
Relations between the countries have been strained over various issues in recent decades, including
Iran's nuclear programme and deaths of Iranians at the Hajj pilgrimage in 1987 and again in 2015.
Most of the 47 people executed by Saudi Arabia were Sunnis convicted of involvement in al-Qaeda-linked terror attacks over the last decade.
