AKnews reports that the process of removing three zeros from the Iraqi dinar and replacing current banknotes with new ones will begin in September.
The announcement, which will see the Iraqi Central Bank (ICB) re-print 30 trillion dinars ($26 billion), was made despite government fear over the project.
Abdul-Hussein Abtan, a member of the economic committee of the Council of Representatives said: "The agreement includes granting the process of switching currency [for a] full year where [both the] old and new currencies will be dealt in the market during this stage."
The ICB described the project as a positive move for the Iraqi economy. But some officials have expressed fears that the project will increase money laundering and are working to convince the ICB to stop the process. The securities committee said deletion of the zeros will negatively affect trading in the stock market.
Abtan added however that the process "will contribute to dealing [with] inflation and facilitating economic cooperation with international banks and reducing social differences in the community."
The ICB previously said that it will consider the requirements of the project with the Council of Ministers to determine whether or not a law needs to be implemented.
The financial committee of the Council of Representatives said on Sunday that the passing of such a law would allow Iraq to address inflation.
The move to delete the zeros will reduce the number of bank notes in circulation and simplify Iraq's payment system.