Total and Iran's National Iranian Oil Company, or NIOC, were to develop phase 11 of the offshore South Pars gas field in the Gulf.
"Total has declared in talks with NIOC that because of sanctions against Iran it cannot have an active role in the project and so a partner has been chosen to transfer the company's stake to," NIOC managing director Seyfollah Jashnsaz was quoted as saying by the official IRNA news agency.
He didn't name the new company and also didn't say whether Total is pulling out of the project completely.
On Feb. 18, Jashnsaz told the Mehr news agency that Total and Iran were set to sign the deal to develop the gas field by March 20.
But he said Wednesday that following an agreement with Total, "another partner will be added to the development of phase 11 of South Pars and the leading share will be transferred from Total to the new partner."
Total had a stake of 50% plus one share in phase 11 of South Pars, which has total reserves of about 500 trillion cubic feet of gas - or about 8% of world reserves.
Iran, OPEC's second largest oil exporter, also has the world's second largest natural gas reserves.
The development of the gas field has been pending for nearly five years since an initial 2004 agreement between Total, the Iranian company and Malaysian state-run oil and gas company Petroliam Nasional Bhd., or Petronas.
The delay was caused by a rise in cost of the project and international sanctions on Iran over its nuclear drive, which the West suspects is a cover for ambitions to build atomic weapons.
Western governments have put pressure on international firms to cut ties with Iran because of the nuclear standoff.