Iran has agreed to share nuclear technology with Nigeria to help it increase its generation of electricity.
A senior Nigerian foreign ministry official, Tijjani Kaura, said the technology was not intended for any military use.
The agreement was announced after a four-day meeting between Iranian and Nigerian officials in Abuja.
Nigeria is Africa's biggest petroleum producer, but poor infrastructure has resulted in severe power shortages.
President Umaru Yar'Adua has said that improving Nigeria's power supply is one of his main priorities.
Details of the deal were not announced, so it is unclear what technology Iran would provide to Nigeria.
Iran is under sanctions for defying United Nations Security Council demands to halt uranium enrichment.
It insists that its nuclear programme is peaceful and says it has a right to continue uranium enrichment.
Iran, also a major oil producer, is due to bring on stream its first nuclear energy station at Bushehr early in 2009.
Iran is due to open its first nuclear plant at Bushehr in early in 2009