Russian and Iranian firms began work on Saturday on two additional reactors at Iran's nuclear power plant on the Gulf coast at Bushehr, the project manager said.

The plant has been a bone of contention with Iran's Gulf Arab neighbours, even after a deal limiting its nuclear ambitions was signed with major powers in July last year.

Project manager Mahmoud Jafari said that construction of the two 1,000 MW reactors, which is being carried out jointly with an Iranian firm, would take a decade and cost up to $10 billion.

"When these two units become operational, 11 million barrels of oil will be saved per year and emission of 7 million tons of greenhouse gas will be avoided," he said.

Some 8,000 workers are involved in the project, which is being led by Russia's Rosatom with Iran's Nuclear Power Production and Development Company.

"The construction of the first reactor proved that Russia always fulfils its obligations towards foreign partners, regardless of the changes in the world's political climate," Rosatom chief Sergei Kirienko said as the foundation stone was laid in Bushehr.

He said the new reactors marked "a serious step towards strengthening Russia's position in the international peaceful nuclear technology market," in comments reported by Russia's RIA Novosti news agency.

A third of the equipment will be locally sourced, Iran's state broadcaster reported.

The Islamic republic is seeking to reduce its reliance on oil and gas with 20 nuclear facilities planned over the coming years, including nine being built with Russian firms.

Russia built the existing 1,000 megawatt reactor at Bushehr that came online in September 2011 and reached full capacity the following year.

In November 2014, it signed a "cooperation contract" to help build the two new reactors at Bushehr, along with plans to eventually construct nine more reactors across Iran.

Two of those may be built at Bushehr, which would take the total to five.

The July 2015 deal Iran signed with six major powers including Russia placed restrictions on the sort of nuclear reactor it could develop and its production of nuclear fuel.

But it did not require Iran to halt its use of nuclear energy for power generation.