Officials have made various proposals to develop a type of homegrown Internet, but few details on the logistics have been disclosed. Minister of Information Technology and Telecommunications Reza Taqipour said the first phase of a "national Internet" will be launched by June.
Experts say this would require special servers controlled by Iran.
Iranian users currently have relatively wide access to the Web and often use filter-busting proxy websites to access blocked sites such as those of the political opposition or some Western governments.
Late last year, the Obama administration opened a "virtual embassy" website as part of Washington's attempts at outreach to Iranians despite three decades without diplomatic ties. The site was quickly blocked by Iranian authorities.
New rules announced earlier this year limited the speed of home Internet links, complicating links to video and other data-heavy downloads. It also required Internet cafe owners to keep customer logs and install surveillance cameras.
Experts in Internet technology question whether Iran will try to create a completely closed Web universe — which is possible but exceedingly complicated — or simply take cues from China's "Great Firewall" policies that tightly control the Web and cut links at any signs of politically uncomfortable chatter or postings.
"It would take years to engage the support of Iranian businesses and businesses from other countries that met Iran's approval to connect to a new Internet that was hosted only on Iranian-owned servers," said Jeffrey Carr, a cyber intelligence expert and consultant to U.S. and other governments on cyber defenses.
"If they think that they can set this up in a matter of months, it has to be a highly filtered Internet which is still hosted on the infrastructure of the World Wide Web," he added. "I really don't think anything else is feasibly possible in this short a period of time."
Murphy reported from Dubai, United Arab Emirates.