In the first visit by a British foreign secretary to Iran since 2003, Hammond is going to reopen the embassy and hold a meeting with his Iranian counterpart Mohammad Javad Zarif.
After arrival in Tehran, Hammond described his visit as a "historic moment in Iran-UK relations."
Simultaneously, Iran’s embassy in London will be also reopened.
Only BBC reporters will be allowed in the ceremony to reopen the British embassy.
Back on Saturday, Iran’s Deputy Foreign Minister for American and European Affairs Majid Takht Ravanchi said Tehran and London have still no plans to appoint ambassadors.
The status of non-resident charge d’affaires of the two countries will change into resident, the Iranian diplomat said, adding that the British embassy will only issue “diplomatic and service visas” after being reopened.
The thaw in Iran-Britain relations follows finalization of a landmark nuclear deal between Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) on July 14.
On November 27, 2011, a large majority of Iranian lawmakers voted to downgrade diplomatic ties with Britain, following Britain’s decision to impose sanctions on the Central Bank of Iran.
Later, angry Iranian students stormed the British embassy in Tehran and pulled down the European country’s flag.
Following the incident, Britain withdrew its diplomatic staff from Tehran on November 30 and asked Iran’s diplomatic delegation in London to leave within 48 hours.
The two countries made diplomatic efforts afterwards to amend ties.