The Iranian navy's replenishment vessel IS Kharg passes through the Suez canal at Ismailia, Egypt, in 2011.
The IRNA news outlet reports multiple efforts over 26 hours failed to save the British-built ship from foundering in what is just the latest disaster to hit the trouble-plagued Iranian navy.
Sailors were captured evacuating the vessel as the fire burned behind them, photos posted on Iranian social media showed.
Kharg, the largest vessel in Iran's navy, sank early Wednesday in the Gulf of Oman near the port of Jask, Hormozgan province, after being ablaze for almost 24 hours, Iranian news agencies have reported. The U.S. Navy later accused Iran of targeting the ships with limpet mines, timed explosives typically attached by divers to a vessel's hull.
Iran's army also identified the Kharg as a "training ship" and confirmed there were nearly 400 crew and trainees on board, before adding all of them were safely evacuated.
The Kharg - described by State TV and the semiofficial news agencies as a "training ship" - can lift heavy cargo and serve as a launch point for helicopters.
Jeremy Binnie of open-source defence intelligence provider Janes said the Kharg was important to Iran as its only dedicated vessel able to resupply warships at sea.
Footage aired by Iranian state television showed a massive column of smoke rising from what it said was the naval supply vessel Kharg on fire before it sank in the Gulf of Oman.
The Kharg was commissioned by the Shah of Iran and built in the United Kingdom in the 1970s. In recent months, however, the navy launched a slightly larger commercial tanker called the Makran it converted into serving a similar function as the Kharg.
Behzad Jahanian, an army press spokesman, said Wednesday the cause of the fire had not been identified. However, it comes after a series of mysterious explosions that began in 2019 targeting ships in the Gulf of Oman.
The incidents came amid heightened tensions between the USA and Iran after then-president Donald Trump unilaterally withdrew America from Tehran's nuclear deal with world powers.
Though there have been accusations of attacks on ships owned by arch-enemies Iran and Israel there in the past.
Last year, a missile was mistakenly fired during a military training exercise at sea, killing 19 sailors and wounding 15 others.
Two crew members died in 2018 when an Iranian navy destroyer hit a breakwater and sank in the Caspian Sea.