NEW YORK: The United States and the European Union both took formal legal steps on Sunday that will lift sanctions once Iran meets the conditions tied to a landmark nuclear agreement with major world powers.

The legal acts have no immediate effect but cement a process that began with a deal reached in July to end sanctions against Iran in exchange for curbs on a programme that the West suspected was aimed at developing a nuclear bomb.

For the waivers to come into force, Iran, which has always denied seeking nuclear weapons, must now demonstrate to the International Atomic Energy Agency (IAEA) that it has restricted its nuclear programme as promised, a process that Western officials say is likely to take at least two months.

Sunday was "adoption day" for the agreement clinched in Vienna by Iran, the United States, Britain, France, Germany, Russia and China and endorsed 90 days ago by the United Nations.

The European Union formally enacted the legislative framework for lifting all nuclear-related economic and financial sanctions on Iran by publishing the documents on its official website.

In Washington, President Barack Obama directed the secretaries of state, treasury, commerce and energy to "take all necessary steps to give effect to the U.S. commitments with respect to sanctions described in (the Iran deal)."

"Today marks an important milestone toward preventing Iran from obtaining a nuclear weapon and ensuring its nuclear program is exclusively peaceful going forward," he said in a statement.

Iran had passed a law on Oct. 14 approving the terms of the nuclear deal.

A range of restrictions have been imposed on Iran over several decades, dating back to 1979 when Iranian students stormed the U.S. Embassy in Tehran. But it was the U.S. and EU sanctions imposed in 2012, which targeted Iranian oil exports and international financial transactions, that inflicted most economic pain on Iran and its people.

Germany's foreign minister said the EU sanctions were likely to remain in place at least until January.