Iran and the US have conducted a prisoner exchange that saw a detained Princeton scholar released for an Iranian scientist held by America, marking a rare diplomatic breakthrough between Tehran and Washington after months of tensions.

In a trade conducted in Zurich, Switzerland, Iranian officials handed over Chinese-American graduate student Xiyue Wang, detained in Tehran since 2016, for scientist Massoud Soleimani, who had faced a federal trial in Georgia.

While the exchange represents a rare win for both countries, it comes as Iran still faces crushing US sanctions and the aftermath of nationwide protests that reportedly saw over 200 people killed.

The exchange was first announced by Iran’s foreign minister Mohammad Javad Zarif via Twitter.

“Glad that Professor Massoud Soleimani and Mr Xiyue Wang will be joining their families shortly,” Mr Zarif wrote.

Glad that Professor Massoud Soleimani and Mr. Xiyue Wang will be joining their families shortly. Many thanks to all engaged, particularly the Swiss government. pic.twitter.com/1TeZUL0CDG

— Javad Zarif (@JZarif) December 7, 2019

Mr Zarif’s tweet confirmed rumours that had been circulating for days that a deal was in the works to free Mr Wang.

President Donald Trump separately acknowledged Mr Wang was free in a statement from the White House, saying he “is returning to the United States”.

“Mr Wang had been held under the pretence of espionage since August 2016,” Mr Trump said.

“We thank our Swiss partners for their assistance in negotiating Mr Wang’s release with Iran.”

The Swiss Embassy in Tehran looks out for America’s interests in the country as the US Embassy there has been closed since the 1979 student takeover and 444-day hostage crisis.

Mr Wang was arrested in August 2016 and sentenced to 10 years in Iran’s notorious Evin prison for allegedly “infiltrating” the country and sending confidential material abroad.

The Chinese-American’s family and Princeton University strongly denied the claims.

Inside Iran’s notorious Evin prison

Mr Wang was arrested while researching the Qajar dynasty that once ruled Iran for his doctorate in late 19th and early 20th-century Eurasian history, according to Princeton.

Hua Qu, the wife of Xiyue Wang, released a statement saying “our family is complete once again”.

Our son Shaofan and I have waited three long years for this day and it’s hard to express in words how excited we are to be reunited with Xiyue,” she said.

“We are thankful to everyone who helped make this happen.”

Iran has detained dual Iranian nationals and those with Western ties in the past to be used as bargaining chips in negotiations.

Western detainees from the US and elsewhere remain held by Tehran. They are likely to be used as bargaining chips for future negotiations amid Iran’s unravelling nuclear deal with world powers.

Mr Soleimani — who works in stem cell research, haematology and regenerative medicine — was arrested by US authorities at Chicago airport on charges he had violated trade sanctions by trying to have biological material brought to Iran.

He and his lawyers maintain his innocence, saying he seized on a former student’s plans to travel from the US to Iran in September 2016 as a chance to get recombinant proteins used in his research for a fraction of the price he’d pay at home.

Iran’s Foreign Minister Mohammad Javad Zarif, left, speaks with Iranian scientist Massoud Soleimani as they leave Zurich. Photo: Twitter

Tensions have been high between Iran and the US since President Donald Trump unilaterally withdrew America from Tehran’s nuclear deal with world powers in May 2018.

In the time since, the US has imposed harsh sanctions on Iran’s economy. The US has also blamed Iran for a series of attacks across the Mid-East.

Lawyers involved in the cases could not be immediately reached. The State Department did not immediately respond to a request for comment.