TEHRAN - Iran and the European Union (EU) will finalize a monetary transaction mechanism soon to avoid the US banking sanctions, Governor of Central Bank of Iran (CBI) Abdolnaser Hemmati announced here on Saturday.

The mechanism will serve as a monetary agreement between Iran and Europe as the two sides discussed the details in a meeting held last week in Brussels, Hemmati was quoted as saying by the state TV.

"The channel is to be established based on a common understanding that the Iranian and European businesses are eager to maintain their ties despite the US sanctions," he said.

According to Hemmati, the payment channel will facilitate the transactions in the businesses between Iran and Europe. Businessmen can use the channel to transfer money.

The Iranian official noted that Iran and Europe want to make the channel operational as soon as possible. Details of the financial mechanism will be released in the near future.

After the US withdrawal from the Iranian nuclear deal in May, the remaining parties including the EU have been trying to keep the deal afloat.

The EU has stressed that it would set up a legal entity to facilitate legitimate financial transactions with Iran in light of the US withdrawal from the international agreement on Tehran's nuclear program and the re-imposition of sanctions.

The legal entity will allow European companies to continue to trade with Iran in accordance with the EU law and could be open to other partners in the world, Federica Mogherini, the EU's foreign and security policy chief, said in September.