Saif Mohammed Al Zaabi, UAE ambassador to Iran, will resume his duties in Tehran in the coming days.
The decision is in line with UAE efforts to strengthen relations between the two countries and increase diplomatic representation overseas.
Last month, Dr Anwar Gargash, diplomatic adviser to the President, said the UAE was working to send an ambassador to Tehran as it seeks to stabilise the region.
He said the idea of a confrontational approach to Iran was not something the UAE supports.
Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Co-operation, also spoke to Hossein Amirabdollahian, Iran's Minister of Foreign Affairs, by phone last month to discuss international and regional issues of common concern.
The ministry said that Mr Al Zaabi will resume his duties at the UAE embassy in Tehran to contribute to advancing bilateral relations and serve the common interests of the two nations and the wider region.