Iranian officials have said the country's missile programme was for deterrent purposes.
Iran's parliament voted Sunday to allocate 520 million USA dollars to develop missile program to fight the US "adventurism" and sanctions, state news agency IRNA reported.
The move follows a spike in tensions between Tehran and Washington since US President Donald Trump took office in January with a vow to get tough on the Islamic republic.
After the result was announced, lawmakers shouted: "Death to America".
Iran's parliament gave initial approval on Sunday to a bill to boost spending on Tehran's missile programme and the elite Revolutionary Guards in retaliation for new sanctions imposed by the United States.
The parliament's majority voted for the bill, which was a response to the USA new sanctions against the Islamic Republic.
Iran denies violating the United Nations resolution which endorsed the Tehran's 2015 nuclear deal, preventing them from conducting activities related to ballistic missiles created to deliver nuclear weapons.
The bill would allocate over $260 million each to Iran's ballistic missile program and the Quds Force - the external arm of the Islamic Revolutionary Guard Corps - which is deployed to Iraq and Syria.
Deputy Foreign Minister Abbas Araghchi also voiced approval of Rouhani's administration for the bill.
Devising the Sunday motion, the Parliament took great care not to violate the nuclear accord and provide excuses for opposing sides, spokesman for Parliament's Committee on National Security and Foreign Policy Hossein Naqavi Hosseini said.
Araghchi said that the Iranian bill was a far-reaching response to the measures passed by US Congress that Iranian media have called the "mother of sanctions" because they sum up all existing anti-Iran sanctions.
The bill tasks Foreign, Intelligence, and Defense Ministries, Iran's Army, and its Islamic Revolution Guards Corps (IRGC), and its Quds Force to produce a comprehensive strategy aimed at countering U.S. threats.