A 20-day-old baby and a two-month-old child were rescued from the online infant-selling ring, the news agency said.
Tehran Police Chief Hossein Rahimi said a third baby has been identified but is yet to be found, ISNA reported.
The rescued babies were being advertised on social media platform Instagram, according to the semi-official KhabarOnline website.
One was being advertised for 400 million Iranian Riyals ($9,490), and the other for 500 million Iranian Riyals ($11,800), Rahimi said, according to KhabarOnline.
They were bought from "poor families" -- one for 50 million Iranian Riyals ($1,100) and the second for 100 million Iranian Riyals ($2,300) -- Rahimi added, according to ISNA.
A spokesperson for Facebook, which owns Instagram, told CNN that the company was investigating. "We do not allow content or behaviour on Instagram that may lead to human exploitation, which includes the sale of children for illegal adoption. We're aware of reports of this activity, and we're continuing to investigate," the statement said.
Facebook has a human exploitation policy, which covers harmful activities related to human exploitation and trafficking, and Instagram users are encouraged to report any concerning content using in-app tools or its reporting form.
Iran is among 21 "Tier Three" countries in the US State Department's annual Trafficking in Persons Report, which ranks nations that comprise the worst offenders on human trafficking.
The countries listed in this tier do "not fully meet the minimum standards for the elimination of trafficking and (are) not making any efforts to do so," according to the report, which was published last year.
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