Vice President Fereidoun Abbasi told the official IRNA news agency that the machines will only produce low-level enriched uranium, which is used to make nuclear fuel, but high-level enrichment makes it suitable for use in the core of a nuclear weapon.
Abbasi said Iranian nuclear scientists began installing the advanced centrifuges at Natanz about a month ago.
"We've produced enough of these machines and are installing and starting them up gradually," Abbasi said.
The announcement coincided with a new round of talks Wednesday with senior International Atomic Energy Agency inspectors over allegations that Tehran might have carried out tests on triggers for atomic weapons. State media said the talks ended late Wednesday but didn't provide any further details. It also could affect negotiations planned later this month between Iran and six world powers.
Iran has more than 10,000 centrifuges that are enriching uranium at Natanz, 225 kilometers (140 miles) southeast of Tehran. But the machines are of the old IR-1 type. Iran told the IAEA last month that it intended to install newer IR-2 centrifuges, machines that can produce more enriched uranium at a shorter period of time.
"The centrifuges installed at Natanz are first-generation machines based on old technology," the semi-official ISNA news agency quoted Abbasi as saying. "We were able to produce composite materials. ... We built centrifuge rotors from those materials which make the machines more durable. The new generation of centrifuges is more efficient."
Abbasi said Iran would use the new machines to produce 5 percent level enriched uranium.
The visit by the U.N. team, led by Herman Nackaerts, comes a day after Tehran raised prospects that the International Atomic Energy Agency could be allowed to inspect Parchin, a military site where the agency suspects nuclear-related experiments were conducted.
But Abbasi said no such visit was on the negotiating table.
"Parchin is not a nuclear site. We've said this repeatedly. There is no word about visiting Parchin or any other site," he said.
Iran says the agency's suspicions are based on forged intelligence provided by the CIA, the Israeli Mossad, Britain's MI-6 and other intelligence agencies.
"Removing ambiguities requires evidence. If the agency has any documents related to ambiguities about Parchin, it is necessary that they give it to us," IRNA quoted Abbasi as saying.
Iranian officials say they have bitter memories of permitting IAEA inspections at Parchin in the past, and replying to a long list of queries over its nuclear program. Tehran says any new agency investigation must be governed by an agreement that lays out the scope of such a probe.
Iran says it cannot allow its security to be compromised by allowing the IAEA access to non-nuclear facilities on the basis of suspicions raised by foreign intelligence agencies that Tehran considers enemies. Abbasi also criticized the IAEA for leaking information on Iran's nuclear program.