State TV's website quoted vice president and nuclear programme chief Ali Akbar Salehi as saying the new reactor would be more powerful than the ageing United States-built research reactor operating in Tehran that is used to make radioactive isotopes for medical purposes.
He added that Iran eventually plans to build four such reactors.
Tehran's first energy-producing reactor is scheduled to begin operations this summer.
President Mahmoud Ahmadinejad said yesterday he would soon announce new conditions for talks with the West but first he wants to punish world powers for imposing sanctions and to force them to "sit at the negotiating table like a polite child and talk to the Iranian nation".
The UN Security Council approved a new round of sanctions against Iran last week for its refusal to curb the country's nuclear programme, which the US and its allies suspect is aimed at producing weapons. Iran denies that.
Mr Ahmadinejad said Iran favours a dialogue with the West, but will announce its conditions soon. He said the carrot-and-stick approach does not work and Iran will not make "one iota of concessions" to the West.
"You showed bad temper, reneged on your promise and again resorted to devilish manners," he said of the powers that imposed sanctions.
"We set conditions (for talks) so that, God willing, you'll be punished a bit and sit at the negotiating table like a polite child," he told a crowd during a visit to the central Iranian town of Shahr-e-Kord.
Mr Ahmadinejad also attacked the US, saying Iran needed to save Americans from "their undemocratic and bullying government". He said there was no freedom in the US and newspapers there were not authorised to write against the Zionists.
UN sanctions were imposed because of Iran's refusal to halt uranium enrichment, a process that can be used in both the production of nuclear fuel for power plants or nuclear weapons.