"We will have two working shifts of 1,000 weavers working for 14 months non-stop to deliver the carpet on time," said Karam Reza Haseli, a deputy manager at the state-supported Iranian carpet company.
Work is due to start in three months.
The carpet has been ordered by the Sheikh Zayed mosque that is being built in Abu Dhabi, after Iran scoured its Gulf neighbors for contracts that might help revive business for local wool merchants, dye makers and weavers.
Although hand-woven carpets are normally Iran's top non-oil export, the industry has been hit by cheaper Pakistani, Chinese and Indian copies of traditional Iranian patterns.
Iran is hoping to break its own record for Gargantuan carpets, which it says is currently held by the 4,400 square meter carpet woven for the Sultan Qaboos mosque in Muscat.
Haseli said the quality of the workmanship would be maintained by paying some of the master craftsmen up to $7 a shift, far more than the $1 going-rate in areas near the Afghan border.
"We intend to monopolize the market with expensive delicate carpets and leave the cheap fake carpets market for others to fight for," Haseli said.