Iran will sign a contract this week to buy 114 Airbus planes from France, during a visit to Paris by Iranian President Sheikh Hassan Rouhani.

Iran will sign a contract this week to buy 114 Airbus planes from France, during a visit to Paris by Iranian President Sheikh Hassan Rouhani, Tehran's transport minister said Sunday.

Abbas Akhoundi, quoted by Iranian media, said the deal "will be signed between Iran Air and Airbus" when Rouhani is in Paris on Wednesday as part of his first official European visit.

Iran needs to modernize its ageing passenger fleet, which has only 150 operational planes out of more than 250, according to Akhoundi.

"We have been negotiating for 10 months" for the purchase of planes but "there was no way to pay for them because of banking sanctions," Iranian state media quoted Akhoundi as saying.

"We need 400 long- and mid-range and 100 short-range planes," he added.

The first batch of new planes will arrive in the country by March 19, he said.

Iran, with a population 79 million, has a good road network but still needs major transport upgrades, which Tehran hopes will aid tourism.

Rouhani is to visit Italy and France on January 25-27 to boost Iran's economic ties with Europe.

Apart from new planes, Iran's airports also need $250 million (230 million euros) worth of upgrades, he said. Only nine of Iran's 67 airports are currently operational.

The Islamic republic on Saturday signed a $2 billion contract with China to electrify the railway line linking Tehran with second city Mashhad, Akhoundi said.