The authorities did not identify who was behind the attack.
At least two people were killed and many more injured in the terror attack outside police headquarters in Chabahar.
Press TV quoted Rahmdel Bamari, governor of Sistan and Balochestan province, as saying that an "explosive-laden vehicle" targeted the police post on Thursday.
Mohammad Hadi Marashi, the deputy governor in charge of security, said the assailants tried to enter the city's police headquarters but "they were prevented by the guards and they detonated the auto bomb".
"The terrorists tried to enter Chabahar police headquarters but they were prevented by the guards and they detonated the auto bomb", Marashi said without elaborating on how many assailants took part. There was no immediate claim of responsibility. Ansar al-Furqan is known to operate in Iran's southeastern Sistan and Baluchistan Province, which sees occasional attacks by Baluch separatists and drug traffickers.
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Iran has stepped up security in border areas after gunmen in September opened fire on a military parade in Iran's southwestern city of Ahvaz, killing 25 people, nearly half of them members of Iran's elite Revolutionary Guards corps. No militant group immediately took responsibility for the attack.
Iranian Foreign Minister Javad Zarif blamed "foreign-backed terrorists" for the attack.
Terror attacks in Shiite Iran are rare, but militants have stepped up action in recent months.
Tehran accuses its Sunni-led regional rival Saudi Arabia and the United States of funding most of these groups, a charge that Riyadh and Washington deny.
Chabahar, near Iran's border with Pakistan on the Arabian Sea, is home to a new port recently built and is an economic free zone for the country.
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