Connections have been slow since last week and some email accounts have been unavailable for several hours each day.
"The cause of the reduced Internet speed in recent days is that part of the fibre-optic network is damaged," Communications Minister Reza Taghipour told Iran's state broadcaster.
"The breakage will be repaired by next week and the Internet speed will be back to normal," he added.
The Iranian week runs from Saturday to Friday.
Taghipour said the undersea optic fibre across the Gulf between the Iranian port of Jask and Fujairah in the United Arab Emirates had been damaged due to shipping traffic and anchoring.
He also acknowledged that text messaging in Iran had been disrupted, blaming it on "changing software."
Iran's anti-government protesters have effectively used the Internet and SMS services to organise rallies and spread news and pictures of the demonstrations.
Opposition supporters have used every opportunity to take to the streets for protests against President Mahmoud Ahmadinejad whose re-election in June they reject as fraudulent.
They have held demonstrations alongside state-sponsored events over the past months and plan to take to the streets again on the February 11 anniversary of the Islamic revolution when annual state-backed marches are held.
Internet connections have slowed to a crawl on past protest days and mobile phone networks been disrupted.
