Iran said it increased its enrichment of low-grade uranium fourfold because stockpile limits under the 2015 nuclear deal no longer applied.
The amount of low-grade uranium Iran can produce was capped at 300 kilograms under the deal to curb its nuclear programme in exchange for sanctions relief.
The announcement came days after Tehran gave European signatories to the deal 60 days to rescue it by finding ways around sanctions reimposed by the US after President Donald Trump pulled out of the agreement last year.
Under the deal, Iran can enrich uranium to 3.67 per cent, far below the 90 per cent required for weapons. It is also well below the 20 per cent level to which Iran enriched uranium before the deal.
The news comes a day after Mr Trump said he would never let Iran develop a nuclear bomb.
"I don’t want to fight. But you do have situations like Iran, you can’t let them have nuclear weapons, you just can’t let that happen," Mr Trump said in an interview with Fox News late on Sunday.
He again took credit for ending the nuclear deal that his predecessor Barack Obama signed in 2015 and indicated that the strategy of isolation and sanctions was working by devastating the Iranian economy.
“I had no idea it was going to be as strong as it was," Mr Trump said. "The country is devastated from the standpoint of the economy."
The US wants Iran to come to the table to negotiate a new deal and, according to CNN, the White House has passed a phone number through Switzerland to Tehran. That call has not yet been placed.
Mr Trump said on Monday that he could negotiate with Tehran "if and when they are ever ready".
US Secretary of State Mike Pompeo called Omani Sultan Qaboos last week and discussed the situation in Yemen and Iranian threats to the Gulf region.
Omani Foreign Minister Yusuf bin Alawi arrived in Tehran on Monday and met Iranian Foreign Minister Javad Zarif.
Meanwhile, Saudi Arabia began distributing invitations through the Arab League to regional states to attend two emergency summits to discuss the implication of recent attacks against the kingdom.
Two US warships have arrived in the region and the US has increased naval patrols in the Gulf of Oman.