The authorities previously threatened to ban WhatsApp and Viber.
An internet watch dog has given the Iranian Government a two-month deadline to regularise the use of Instagram. If the Iranian Goverment does not compy, the photo sharing site will be blocked completely.
Last month authorities in Iran blocked the "Rich Kids of Tehran" Instagram account, belonging to the wealthy people of Tehran, due to featured images of parties, girls and alcohol provoking indignation in the sanctions-hit country.
Mohammad Ali Asfani, an Iranian committee for web filtering, said that two months have been given for the authorities to contact the Facebook owned service over securing access to its contents.
ISNA news agency reported Asfani saying: "If this is done, we will not filter Instagram."
Social media networks like Facebook and Twitter often face opposition in Iran, as they are considered to undermine the values of the Islamic Republic.