The three feet thick and 10 feet high fence, built with concrete and fortified by steel rods, will span the impenetrable mountainous terrain in south eastern Iran, Brig Gen Ahmad Vahidi told IRNA news agency.
"The fence is to prevent villains from crossing into the Islamic republic," the General said.
The fence would start from Taftan area to Mand in the Baloch majority Sistan province, which borders Pakistan's Balochistan province, the report said.
Though the Iranian defence minister did not mention any Pakistani terror groups, the Pakistan-based Baloch group Jundullah has been known to operate on both sides of Baloch area.
The group in a major strike in Iranian border town of Zahedan killed 13 people, including nine prominent commanders of the Iranian Revolutionary Guard on Feb 17, 2007.
Another terror attack took place on Dec 15 recently when Jundullah militants struck a mosque in Chabhar city, where people were commemorating the martyrdom of third Shia apostle Imam Hussein.
Jundullah leader Abdolmalek Rigi was arrested by Iranian intelligence forces in February 2010 and subsequently hanged.
Iran is Pakistan's second neighbour after India to build a anti-terror fence on the border. India recently has completed an electrified fence all along the Line of Control in Jammu and Kashmir and parts of international border in Punjab.