PSA Peugeot Citroen is to pay Iran 427 million euros in compensation.
The money will cover losses caused by the French car-maker quitting the country due to sanctions.
Peugeot suspended sales in 2012 when an international boycott against Iran over to its nuclear programme was extended to the automobile sector.
Before that it was the biggest-selling European carmaker in Iran.
The compensation would be mostly in services and discounts, including spare parts for current models being produced in Iran. It has also written off 11 million euros of debt and 65 million euros of royalties payments to its partner Iran-Khodro.
Last month, Peugeot and Iran-Khodro signed a joint-venture deal to produce latest-generation vehicles in Iran.
For Peugeot, the factory tie-up is important. When it suspended sales in Iran in 2012 it lost nearly 10 percent of global deliveries and interrupted a relationship dating back more than 50 years.
Four million Peugeot cars are currently on the roads in Iran.