Javad Oji, managing director of the National Iranian Gas Co., told the oil ministry's official Shana news agency an export deal was signed with the Iranian government for more than 800 million cubic feet of natural gas per day.
No financial terms were disclosed.
He said a pipeline from Iran would provide energy for power plants in parts of Baghdad province. Iraq lacks adequate electric power despite its vast oil reserves.
"Construction of the 140-mile [long] 48-inch [diameter] gas pipeline is nearing completion and its extension in Iraq territory will also come to an end in the next two months," he said Monday.
Iran has said it is ready to deliver its vast natural gas reserves to neighboring countries. Western sanctions imposed on its energy sector, however, have handicapped some of Iran's energy ambitions.
Oji said Iranian gas would come from the offshore South Pars field, one of the largest in the world. Iran holds the second-largest deposits of natural gas in the world behind Russia.