A high-level delegation including Adviser to the Prime Minister on National Security and Foreign Affairs, Minister for Finance, Minister for Petroleum and Natural Resources, Special Assistant to the Prime Minister on Foreign Affairs and Balochistan Chief Minister is accompanying Sharif.
Sharif will meet President Hassan Rouhani to discuss bilateral issues and call on the country's Supreme leader Ayatollah Ali Khamenei.
This will be Sharif's first visit to Tehran after coming into power last year and is taking place in the aftermath of a number of developments in the region from the border tensions to Islamabad's reported policy shift towards Syria.
Analysts here say Pakistan is interested in bilateral cooperation in power and energy sector.
The visit would provide an opportunity to discuss the stumbling blocks in the execution of the multi-billion dollar Iran-Pakistan gas pipeline project.
It will also provide an opportunity for the leaders of the two sides to meet and mend the frayed relations following the recent controversy over the kidnapping of the Iranian border guards.
Pakistan is walking the tight rope between the Sunni majority Saudi Arabia, a close ally, and the Shia majority Iran, an important neighbour.
While Tehran is supporting the regime of Bashar al Assad, the Saudis are backing Sunni militant groups trying to dethrone him.
Ever since Saudi Crown Prince Salman Bin Abdulaziz Al-Saud visited Pakistan in February, there is intense speculation here that Pakistan has tilted in Riyadh's favour.
Speculation about a shift from Pakistan's traditional policy of non-interference in the affairs of Muslim countries emanated from a joint declaration that had called for the "formation of a transitional governing body" in Syria.
It was also fueled by media reports claiming Saudi Arabia was in talks with Pakistan to provide anti-aircraft and anti-tank rockets to the Syrian rebels.
He was implied to be referring to the delicate balance that Pakistan has to strike in ties with Saudi Arabia and Iran.
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