Mahmoud Ahmadinejad is due in Baghdad next month for the first visit by an Iranian president to Iraq, government officials in Iraq have said.
Mr Ahmadinejad is expected to meet Iraq's President Jalal Talabani and PM Nouri Maliki during his two-day visit, which is scheduled to begin on 2 March. Iran and Iraq fought a devastating war between 1980 and 1988 in which about one million people died.
Meanwhile, Iran has postponed talks with the US on Iraqi security.
No reason was given for calling off the talks, which were meant to have been held on Friday.
US and Iranian officials met three times last year to discuss how best to stabilise Iraq.
It is one of the few forums in which the two countries, which cut diplomatic ties in 1979, have direct contact.
"We are happy to sit down for the talks but it's increasingly clear Iran is not," US embassy spokeswoman Mirembe Nantongo said.
'Good relations'
Iraq and Iran were arch-enemies during the rule of Saddam Hussein, but ties have improved since he was overthrown and a Shia-led government came to power.
President Talabani and Prime Minister Maliki both visited Tehran last year.
The BBC's John Leyne in Tehran says Mr Ahmadinejad's visit, if it goes ahead, will set the seal on reconciliation between Iran the two countries.
An Iraqi government spokesman said the leaders would discuss bilateral relations and joint projects.
"It's significant in the sense that Iraq wants to have good relations with Iran," he said.
But he added that Iran should not interfere in Iraq's internal affairs, and should respect Iraq's right to have relations with any country it might choose.
Iran has been accused by the United States of helping insurgents in Iraq, but the Iranian government insists it is actually playing a positive role there.
The US will have to give its tacit approval for Mr Ahmadinejad's visit to go ahead, our correspondent says.