Australia Tuesday expanded sanctions against Iran to restrict business with the country's petroleum and financial sectors as concern mounts over Tehran's suspected nuclear weapons programme.

Britain, Canada and the United States slapped fresh sanctions last month on Iran following a UN agency report that strongly suggests the country is researching nuclear weapons.

The European Union followed suit by expanding a blacklist against Iranian firms and individuals, although Iran has dismissed the UN report as baseless.

Foreign Minister Kevin Rudd said Australia's new measures targeted entities and individuals involved in Iran's ballistic missile and nuclear programmes, and underlined Canberra's mounting worries.

"The measures will also further restrict business with Iran's petroleum and financial sectors," he said, without going into details.

"Iran must take steps required by the UN Security Council and the IAEA (International Atomic Energy Agency) and engage constructively with the international community on its nuclear programme."