Messaging app Telegram and photo-sharing app Instagram, which have been used to organise demonstrations, will be blocked temporarily in the country.
"It has been decided in the highest security level to restrict access to Telegram (messaging app) and Instagram," Iranian state television quoted an informed source as saying.
The move came as protests entered their fourth day after spreading to the capital Tehran yesterday, with crowds confronting police and attacking some state buildings.
Social media has been exploited by protesters over other means of communication to share information about demonstrations owing to the country's tight media control.
Telegram is particularly popular in Iran. The company's CEO Pavel Durov tweeted yesterday that he had refused to shut down "peacfully protesting channels" before autorities blocked access to the app.
Iran's opposition said two demonstrators were shot dead by riot police in the city of Dorud on Saturday, but an Iranian governor blamed "foreign agents" for the deaths.
Video footage posted on social media today appeared to show police in Tehran firing water cannons in an attempt to disperse demonstrators gathering in Ferdowsi Square in the centre of the capital.
Another online video purported to show a clash between protesters and police in the city of Khoramdareh in Zanjan province in the country's northwest.
Demonstrations started in the north-east as an outcry against economic hardship but turned political in many areas and saw some people chanting slogans against Supreme Leader Ayatollah Ali Khamenei, President Hassan Rouhani and Iran's foreign policy.
Rouhani said in a statement on Sunday evening: "Criticism and protest is the people's right; It must solve the problems of the country and improve people's lives It is different from violence and destruction of public property. Government and people solve problems together. One who calls the Iranian nation a terrorist does not have the right to compassion for our people"
The rallies are the largest since revolts against President Mahmoud Ahmadinejad 2009.