The official agency said Iran football federation president Mehdi Taj had confirmed the deal and the former Belgian striker would sign a contract later Wednesday.
It said the 50-year-old who was capped 70 times for his country was expected to sign on until the end of the 2022 World Cup for a fee of $1.2 million (1 million euros) a year.
He replaces Portuguese coach Carlos Queiroz who stepped down after eight years in charge in January following Iran's semi-final exit in the Asian Cup when they went down 3-0 to Japan.
He led Iran to two World Cup finals and extended his contract to 2019 after the 2018 tournament in Russia.
Wilmots guided Belgium into the 2014 World Cup during his stint as coach with them between 2012-2016.
He took charge of Ivory Coast in 2017 but parted company after failing to qualify the west Africans for the 2018 World Cup.