Directed by Asghar Farhadi, the movie tells the story of a crumbling marriage and looks at the conflict between strict religious observance and the shifting values of Iran's educated urban elite.
"Following a tug-of-war of several weeks between the [Iranian] authorities and the rest of the profession, Asghar Farhadi's film 'A Separation' was finally chosen to represent Iran at the 84th Oscars ceremony," Memento Films said in a statement.
It will be submitted in the Best Foreign Film category ahead of the Oscars ceremony on 26 February, said the statement, adding that the news was announced Friday in Tehran by an Iranian film body, the Farabi Foundation.
The film, whose full title is "Nader and Simin: A Separation," is also to be released by Sony Pictures Classics in US movie houses on 30 December in order to make it eligible to run in the Best Director and Best Screenplay categories, the statement said.
"A Separation" triumphed at the Berlin festival in February, picking up the Golden Bear award as well as top acting prizes for its entire cast.
Released in France in June, the film became a box office hit, attracting more than 900,000 viewers, and is still playing in more than 100 movie houses nationwide.