The Swan Hunter built ship the Kharg has caught fire and sunk in the Gulf of Oman.
The 650ft cargo vessel, designed to resupply ships at sea, caught fire on Tuesday after a fault "in one of its systems" during a training exercise.
All 400 crew and students on board the vessel were evacuated with only minor injuries, the Iranian military said, before firefighters tried to tackle the blaze.
But they were unable to save the ship which sank on Wednesday morning "after 20 hours of dedicated efforts to save it", Iranian officials said.
The Kharg was launched at Wallsend-based Swan Hunter in 1977 and completed in 1980. Iran purchased the vessel for £40m - £175m in today's money.
It is not yet clear how the fire started, but it comes amid attacks on cargo ships and military vessels in recent months that Iran and Israel have blamed on one another - worsening already fraught relations between the old adversaries.
Photos on social media showed sailors in life jackets evacuating the ship as it sank near the port of Jask, about 790 miles from the capital Tehran.
"All efforts to save the vessel were unsuccessful and it sank," said Iran's semi-official Fars news agency.
The ship was on a training mission, according to state TV.
According to Sky News, it happened in an area where there have been accusations of attacks on ships owned by Iran and Israel.
The Kharg is named after the island that's home to Iran's main oil terminal. It is one of the few Iranian naval ships that can replenish other vessels and is able to lift heavy cargo and launch helicopters.
The sinking is the latest in a number of recent naval disasters for Iran, said Sky. A missile fired during a training exercise in 2020 mistakenly hit a ship - also near the port of Jask, killing 19 sailors; and in 2018 one of its destroyers sank in the Caspian Sea.
