"The drill will be held in the waters of Strait of Hormuz, Makran coast, Oman Sea and the north of the Indian Ocean, covering 2 million square kilometres and going on for three days," said Rear Admiral Hossein Khanzadi, Iran's navy commander.

The exercise aims to evaluate the navy's equipment, practice launching weapons and "enable the troops to gain readiness for a real battle," he added.

The strait at the mouth of the Gulf is crucial to global energy supplies, with about a third of the world's seaborne oil passing through it every day.

The show of military might comes at a time of heightened tensions with Iran's main regional rival Saudi Arabia and with Washington, which last year withdrew from the 2015 nuclear deal with Iran and reimposed sanctions on the Islamic Republic.

The Strait of Hormuz is an international transit route where American forces routinely pass and which has seen tense encounters between them and Iranian forces in the past.

Dubbed as "Velayat 97," the drill will showcase Iran's submarines, warships, helicopters and drones, according to the admiral.

The exercise will also include missile launches from the vessels, Khanzadi added.