The President said that “at the heart of the Iran deal is a giant fiction” — that the regime wanted peace.
He said the nation had continued to develop nuclear capabilities, and if he allowed the “defective” accord to remain in place, it would lead to an arms race in the Middle East.
Mr Trump said he would reimpose the highest level of economic sanctions, which were lifted under the 2015 deal, warning that any nation helping Iran “in its quest for nuclear weapons” could also be strongly penalised by the US.
“We will not allow a regime that chants ‘Death to America’ to gain access to the most deadly weapons on Earth,” he said.
His decision raised fears Iran could mount an attack on Israel, which pushed for an end to the deal. The announcement also saw oil prices plummet by 1.2 per cent.
Barack Obama, who brokered the deal, said in a statement the decision was “a serious mistake” and weakened America’s ability to confront Iran’s “destabilising” behaviour.
In a rare public criticism of Mr Trump, the former president said the deal had accomplished the very outcome that is being pursued with North Korea.
“The consistent flouting of agreements that our country is a party to risks eroding America’s credibility, and puts us at odds with the world’s major powers,” he said.
“Every aspect of Iranian behaviour that is troubling is far more dangerous if their nuclear program is unconstrained.”
Mr Trump’s choice had become known as the “nuclear option”, because it is almost certain to signal an end to the multination agreement. Iran will now have to decide whether to follow the US and exit the deal, or try to retain the agreement with other countries.
Mr Trump insisted the US “no longer makes empty threats”, in a televised address from the White House. He also noted that secretary of state Mike Pompeo was on his way to North Korea to discuss the upcoming summit between the US President and Kim Jong-un.
The 2015 deal between multiple world powers lifted most sanctions against the Iran, provided it agreed to restrictions on its nuclear program that would prevent it producing a bomb, and regular inspections.
Now, sanctions on Iran’s central bank — intended to target oil exports — will kick back in on Saturday, the next deadline for renewal, rather than being waived again.
The administration will give those who are doing business with Iran between three and six months to wind down business and avoid breaching those sanctions.
But it is still possible that a new agreement could be reached. Administration officials briefing congressional leaders about Mr Trump’s plans reportedly emphasised that just as with the ditched Trans-Pacific Partnership and Paris climate agreement, he remains open to renegotiating a better deal.
European nations have in recent days given in to many of Mr Trump’s demands in the hope he would choose a more gradual approach, which might have allowed the deal to survive.
But they failed to prevent his decision to reimpose sanctions and walk away from the signature Obama agreement, which Mr Trump has attacked since the election campaign.
Israeli prime minister Benjamin Netanyahu praised Mr Trump’s “historic move”, while while the military said forces were on high alert near its border with Syria after spotting Iranian activity.
French President Emmanuel Macron, who strongly supports the deal and tried to persuade Mr Trump to stay in it during a visit to Washington last month, said he was “disappointed” by the announcement.
EU foreign policy chief Federica Mogherini said: “Together with the rest of the international community, we will preserve this nuclear deal.”
France, the UK and Germany have previously vowed to maintain the deal without the US, but that could potentially put them at risk of sanction.
Hours before the announcement, European members of the agreement met to underline their support for it. Officials from Britain, France and Germany met in Brussels with Iran’s deputy foreign minister for political affairs, Abbas Araghchi.
If the deal collapses, Iran will be free to resume prohibited enrichment activities, while businesses and banks doing business with Iran will have to rush to extricate themselves or run afoul of the US.
American officials have been making plans to sell the pullout to the public and explain its complex financial ramifications, said US officials and others, who weren’t authorised to speak and requested anonymity.
Mr Trump built up anticipation for his announcement by tweeting that he would reveal his decision at 2pm at the White House.
In Iran, many are deeply concerned about how his decision could affect the already struggling economy.
President Hassan Rouhani sought to calm nerves during a speech on Tehran, smiling as he appeared at a petroleum expo in the capital. He didn’t name Mr Trump, but emphasised that Iran continued to seek “engagement with the world.”
“It is possible that we will face some problems for two or three months, but we will pass through this,” Mr Rouhani said.
The first 15 months of the Trump presidency have been filled with many “last chances” for the Iran deal in which he’s repeatedly postponed the decision.
An immense web of sanctions, written agreements and staggered deadlines make up the accord. Sanctions on specific Iranian businesses, sectors and individuals will snap back into place in July unless Mr Trump signs another waiver.
Even the secretary of state and the UN agency that monitors nuclear compliance agree that Iran, so far, has lived up to its side of the deal. But the deal’s critics, such as Israel, the Gulf Arab states and many Republicans, say it’s a giveaway to Tehran that ultimately paves the path to a nuclear-armed Iran several years in the future.
Iran has been coy in predicting its response to a US withdrawal. For weeks, Iran’s foreign minister had been saying that a reimposition of US sanctions would render the deal null and void, leaving Tehran little choice but to abandon it as well.
But on Monday, Mr Rouhani said Iran could stick with it if the European Union, whose economies do far more business with Iran than the US, offers guarantees Iran would keep benefiting. For the Europeans, a Trump withdrawal would also constitute dispiriting proof that trying to appease him is futile.
The three EU members of the deal — Britain, France and Germany — were insistent from the start that it could not be reopened. But they agreed to discuss an “add-on” agreement that would not change the underlying nuclear deal, but would add new restrictions on Iran to address what Mr Trump had identified as its shortcomings.
The President wanted to deter Iran’s ballistic missile program and other destabilising actions in the region. He also wanted more rigorous nuclear inspections and an extension of restrictions on Iranian enrichment and reprocessing rather than letting them phase out after about a decade.
Negotiating an add-on agreement, rather than revising the existing deal, had the added benefit of not requiring the formal consent of Iran or the other remaining members: Russia and China. The idea was that even if they baulked at the West’s impositions, Iran would be likely to comply anyway so as to keep enjoying lucrative sanctions relief.
Although the US and Europeans made progress on ballistic missiles and inspections, there were disagreements over extending the life of the deal and how to trigger additional penalties if Iran were found violating the new restrictions, officials revealed.