An historic nuclear deal with Iran has resulted in the freeing of US prisoners held in the Muslim nation and the lifting of long-standing sanctions that damaged its economy.

The United Nations (UN) and international nuclear inspectors confirmed on Sunday (AEDT) that Iran kept its promise from July 2014 to scale back nuclear activities, with the US and the European Union announcing they had lifted economic sanctions in response.

Following the sanctions announcement, a prisoner swap occurred between Iran and the US on Monday (AEDT).

• European Union, USA lift sanctions against Iran
• Iran releases US sailors
• Burkina Faso abductees ‘dedicated lives to others

Five US detainees were freed by Tehran, including Washington Post journalist Jason Rezaian.

“We can confirm that our detained US citizens have been released and that those who wished to depart Iran have left,” a senior US administration official said.

Several Iranian-Americans held in US prisons after being charged or convicted for sanctions violations were also released, their lawyers told the news agency Reuters on Sunday.

Mr Obama said the US still had profound differences with Iran. Photo: Getty

President Barack Obama heralded the implementation of the nuclear deal with Iran, saying he was hopeful the “good day” signalled an opportunity for Iran to work more co-operatively with the rest of the world.

“This is a good day because once again we are seeing what’s possible through strong American diplomacy,” Mr Obama said at the White House.

“These things are a reminder of what we can achieve when we lead with strength and with wisdom.”

But the President said the US would still continue to enforce sanctions against its ballistic missile program.

Speaking to parliament earlier on Sunday, Iranian President Hassan Rouhani hailed the nuclear deal with world powers and the resulting lifting on Saturday of US, European and United Nations sanctions as a “golden page” in Iran’s history

Mr 
Rouhani said he looked forward to an economic future less dependent on oil exports.

“We Iranians have reached out to the world … have opened a new chapter in the relations of Iran with the world,” Mr Rouhani said.

“[Iran is] not a threat to any government or nation … [the agreement] is not a loss for any country”.

But critics, including Mr Obama’s Republican opponents, poured scorn on the deal, saying it failed to do enough to ensure Iran would never acquire the bomb.

Israel, widely assumed to be the Middle East’s only nuclear-armed state and Iran’s arch-foe, repeatedly slammed the agreement.

Israeli Prime Minister Benjamin Netanyahu said on Saturday that Iran “has not relinquished its ambition to obtain nuclear weapons, and continues to act to destabilise the Middle East and spread terror throughout the world”.

Meanwhile, last Tuesday and just days before the deal would be signed, Iran captured then released 10 US sailors after they entered Iranian territorial waters.

Iran’s Islamic Revolutionary Guard Corps (IRGC) said on release that the ship had sailed into the region by mistake.

– with ABC/AAP