“An informed diplomatic source said Sunday that Saudi Arabia had agreed to grant a visa to the head ... of Iran’s interests section,” the official news agency added.
The office is expected to be set up within the Swiss diplomatic mission in Saudi Arabia, based on an agreement signed in 2017.
There was no immediate official Saudi reaction to the Iranian report.
Following the approval of Saudi Arabia's Foreign Ministry, Head of the Oman and Yemen Department at Iran's Ministry of Foreign Affairs Mohammad Alibek has been appointed as the caretaker of the Islamic Republic's interests section in the city of Jeddah, the report said.
Observers saw the move as a positive diplomatic step in Tehran-Riyadh relations, it added.
Iranian Foreign Ministry spokesman Bahram Qassemi said on Saturday that Iran plans to open an interests section in Saudi Arabia.
Iran intends to open an interests section in Saudi Arabia, two years after the kingdom unilaterally broke off its diplomatic ties with the Islamic Republic.
“There have been advances made in the past two weeks, and I believe there are signs that the interests section will open and become operational,” Qassemi said.
Relations between Iran and Saudi Arabia first soured after a deadly human crush during the Hajj rituals in September 2015, when hundreds of Iranian pilgrims among others lost their lives.
Tensions further escalated a few months later following the kingdom's execution of prominent Shia cleric Sheikh Nimr al-Nimr.
Riyadh cut off diplomatic ties with Tehran in January 2016 following angry protests in front of its diplomatic premises in the cities of Tehran and Mashhad against the execution.
Ever since breaking its ties with Iran, the kingdom has ramped up its negative rhetoric against the Islamic Republic over its role in the region.
Press TV, Reuters also contributed to this story.