"The Revolutionary Guards' helicopters this morning found the wreckage of the plane on Dena mountain", Ramezan Sharif, spokesman of the Iran's Islamic Revolutionary Guards Corps (IRGC) told state broadcaster IRIB on Tuesday.
The Aseman-operated plane crashed near the town of Semirom after taking off from Tehran's Mehrabad airport, emergency services spokesman Mojtaba Khaledi told ISNA news agency.
There were 60 passengers and six members of the crew aboard the plane.
The ATR aircraft with 66 passengers and crew on board went missing and due to bad weather conditions search for finding the wreckage of the plane continued for three days.
The plane crashed near Mount Dena within the Zagros Mountains in central Iran's Isfahan Province some 500 kilometers from Teheran and 25 kilometers just before its destination.
The incident has reawakened concerns over aviation safety in Iran, which has been exacerbated by global sanctions over the years.
The source said the military is also participating in search operations at the crash site.More news: Benjamin Netanyahu: Polish PM's Holocaust comments 'outrageous'
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Earlier reports said 66 people had died in the crash, but one would-be passenger did not board the flight, Aseman Airlines confirmed Sunday.
The United Nations said Secretary-General Antonio Guterres joined world leaders in expressing sorrow over the crash.
Aseman Airlines was blacklisted by the European Commission, in December 2016, over safety concerns.
Indicative of how this impacts airlines in the country is the average age of flag carrier Iran Air's fleet: 21.1 years, according to Air Fleets, which includes a 38-year-old Airbus A300.
The country has struggled to obtain spare parts to maintain its planes in the face of global sanctions imposed to curb its nuclear programme.
Aseman Airlines has undergone other significant crashes with fatalities as well. However, the breakthrough Nuclear Deal with the U.S. in 2015 has paved way for modernization of the Iran Aircrafts. The Civil aviation authority in Iran has however said that it would not confirm the identities of the passengers before all the bodies had been recovered.
The sale could still be scuppered if US President Donald Trump chooses to reimpose sanctions in the coming months, as he has threatened to do.