Britain has been a focus of Iranian ire over steps to tighten sanctions over its disputed nuclear programme.
Britain shut Iran's embassy in London and expelled all its staff in November after its embassy in the Iranian capital Tehran was attacked by a crowd angry at British sanctions.
Press TV is a 24-hour news channel owned by the Iranian state, available via satellite around the world and on the Internet.
Its English-language service will be removed from Sky TV's satellite platform in Britain later on Friday as a result of the decision. It will still be available online.
Press TV said on its website the move was "a clear example of censorship".
The roots of the Ofcom decision lie in a ruling last month to fine Press TV 100,000 pounds ($154,700) for broadcasting an unauthorised interview with an imprisoned Newsweek journalist.
Ofcom said it emerged during that case that editorial control of Press TV was exercised from Tehran rather than London and that the broadcaster had failed to amend its licence accordingly.
Ofcom also said that Press TV Limited had not paid the 100,000 pound fine and that it would pursue that as a separate matter. (Reporting by Keith Weir, additional reporting by Robin Pomeroy in Tehran; editing by Philippa Fletcher)
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