A video posted on Iranian state television's website showed nuclear chief Ali Akbar Salehi saying the work had begun as part of routine maintenance at the reactor in Arak in the country's northwest. Officials have said redesigning the reactor will delay its launch by about three years.
As originally designed, the reactor at Arak could have produced substantial amounts of plutonium, material that can be used as the fissile core of a nuclear weapon. Iran has offered to redesign it to produce only a fifth of the plutonium it could have made.
Iran has opposed that, saying a heavy water reactor is needed to produce medical radioisotopes while a light water reactor, like the one Iran has at Bushehr, is used to generate electricity.
The Arak reactor remains one of the sticking points between the Islamic Republic and world powers as they try to negotiate a permanent deal over Iran's contested nuclear program.
Last year, they struck an interim deal that saw Iran agree to limit its uranium enrichment in return for the easing of some economic sanctions. Negotiators now face a November deadline to come to a final deal.
On Saturday, Iran inaugurated a new plant to convert a type of uranium into a material that cannot be used to make nuclear weapons.
Also as part of the interim deal, Iran has allowed international inspectors from the United Nation's nuclear watchdog the International Atomic Energy Agency to visit its nuclear facilities, including those at Arak.
Iran says its nuclear program is for peaceful purposes, like medical research and generating electricity. The West has said Iran could use its program to build atomic weapons.
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