Britain's Treasury chief George Osborne says the UK will cut financial ties with Iranian banks over fears about its nuclear program.

Osborne says all UK financial institutions will cease business relationships and transactions with all Iranian banks, including their Central Bank of Iran from 3pm GMT Monday.

Osborne said Monday this is the first time the British government has cut an entire country's banking sector off from the U.K.'s financial sector.

He said he acted after the International Atomic Energy Agency highlighted fresh concerns about the possible military dimensions of Iran's nuclear program.