The move comes just months after the shock presidential election victory of hardliner Mahmoud Ahmadinejad and amid escalating tensions between Iran and the West over its nuclear programme.
"The missions of some 40 ambassadors or heads of mission will come to an end from now until the end of the year (March 2006), and after the designation of replacements they should in principle continue to work for the foreign ministry," Manouchehr Mottaki was quoted as saying by Iranian news agencies.
Ahmadinejad's victory led to concerns of a purge of key institutions, although the official IRNA news agency quoted Mottaki as describing the changes as "normal". He said several of the diplomats were close to or had asked for retirement.
Several of the diplomats being changed are seen as having been close to either the former reformist government or more moderate conservative forces and were engaged in the lengthy nuclear talks with Britain, France and Germany.
Those talks broke down in August when Iran rejected an EU offer of trade and other incentives in exchange for a cessation of fuel work and resumed uranium conversion, a precursor to ultra-sensitive enrichment work.
In September the International Atomic Energy Agency (IAEA) found Iran to be in "non-compliance" with the nuclear Non-Proliferation Treaty (NPT) in a resolution that paves the way for a UN Security Council referral.
Ahmadinejad and Iran's new top nuclear negotiator Ali Larijani, also a hardliner, have openly criticised the former negotiating team -- led by Hassan Rowhani -- for being too weak.
Western diplomats said that some of those being changed had been involved in secret contacts with the United States following the US invasion of Afghanistan that continued until shortly after the invasion of Iraq.
Those set to go include Iran's ambassadors in London, Paris, Berlin, Geneva and Kuala Lumpur. Tehran's ambassador in London, Mohammad Hossein Adeli, has only served for a year.
However Mottaki said one of Iran's most prominent diplomats, UN envoy Mohammad Javad Zarif, was not immediately being replaced.