The Treasury Department said Bank Mellat "has facilitated the movement of millions of dollars for Iran's nuclear program."

Sanctions also were slapped on Bank Mellat chairman Ali Divandari who "plays a significant role" in the bank's "activities and decision-making process."

US officials in 2008 imposed sanctions on three Iranian banks, including Bank Mellat, accusing them of financing weapons proliferation.

Thursday's announcement includes the First East Export Bank PLC, a Mellat subsidiary based in Labuan, Malaysia.

The executive order authorizing the move "freezes the assets of designated proliferators of weapons of mass destruction and their supporters and prohibits US persons from engaging in any transaction with them," the Treasury Department said.

Undersecretary for Terrorism and Financial Intelligence Stuart Levey said that the measure helps "protect the integrity of the US financial system and ensure that banks and regulators around the world are aware that First East Export Bank is in fact, an arm of Bank Mellat."

Mellat is "an institution that has supported Iran's nuclear program in violation of UN Security Council resolutions," Levey said.

Britain in October ordered financial companies to stop trade with Bank Mellat amid alleged nuclear links.

The United Kingdom's Treasury Minister Sarah McCarthy-Fry said the move was taken after Bank Mellat provided services to an organization "connected to Iran's proliferation-sensitive activities."

Western powers suspect Iran's nuclear program is aimed at making atomic weapons, a charge Tehran denies.

The once wholly state-owned Bank Mellat began a process of privatization earlier this year with the aim of selling 80-percent ownership over two years.

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