Foreign Secretary Dominic Raab said reports from Iran that said Britain would pay a £400 million debt to secure the release of Nazanin Zaghari-Ratcliffe are "not yet accurate".
He told a press conference at Downing Street: "It's incumbent on Iran unconditionally to release those who are held arbitrarily and, in our view, unlawfully and the reports I'm afraid are not yet accurate in terms of the suggestion of her (Ms Zaghari-Ratcliffe's) imminent release."
An anonymous official on Iranian state TV said: "The release of Nazanin Zaghari-Ratcliffe in exchange for the UK's payment of its 400 million pound-debt to Iran has also been finalised."
Mr Ratcliffe, who has campaigned for the release of his wife since her detention in 2016, said the family had not been updated but welcomed the signals from Tehran over the long-running dispute as “a good sign”.
He said: “We haven’t heard anything.
“It’s probably a good sign that it’s being signalled, just as last week’s sentence was a bad sign.
“But it feels part of the negotiations rather than the end of them.”
The British-Iranian dual national was sentenced to a fresh jail term of one year last week and handed a year-long travel ban in Iran on a new charge of "spreading propaganda against the regime".
She has already served a five-year prison sentence after being detained on charges relating to national security in 2016.
The mother-of-one was arrested at Tehran airport as she made her way back to the UK after a visit to her parents to introduce them to her daughter.
She and her family believe she is being held as political leverage to try to force the UK's hand in a long-running financial dispute between the UK and Iran.
It dates back to the 1970s when the then-shah of Iran paid the UK £400 million for 1,500 Chieftain tanks.
When the shah was toppled in 1979, Britain refused to deliver the tanks to the new Islamic Republic but kept the cash, despite British courts accepting it should be repaid.
Asked about the debt on Sunday, Mr Raab said: "It's not solely about that.
