The South Asian Association for Regional Cooperation on Wednesday decided to associate Iran as an observer making it the sixth nation of the grouping to have that status.
"The heads of state or government welcomed the Islamic Republic of Iran to be associated as observer to SAARC," said the declaration adopted at the end of two-day summit of the eight-nation South Asian grouping in Delhi.
With the development, Iran can participate in SAARC meets along with other observers -- the US, European Union, China, South Korea and Japan.
The decision came on an application moved by Iran to be associated with SAARC, which comprises India, Pakistan, Bangladesh, Sri Lanka, Bhutan, Nepal, Afghanistan and Maldives.
The development assumes significance as Iran is currently locked in a stand-off with the West over its controversial nuclear programme and the UN recently imposed sanctions on it.
The summit also welcomed China, Japan, EU, South Korea and the US on being associated as observers to SAARC.
"The region would benefit from these external linkages and help in economic integration with the international community," the SAARC declaration noted.