President Trump has refused to certify the nuclear deal with Iran, calling it "one of the worst and most one-sided" agreements the US has ever signed.
The landmark Obama-brokered deal limited Iran's nuclear capability in return for the lifting of some sanctions.
Mr Trump savaged Iran's "rogue regime" in a speech at the White House, in which he also imposed extra sanctions on the country's Islamic Revolutionary Guard.
He blamed Iran for spreading "death, destruction and chaos all around the world" and said it had committed multiple infringements of the deal.
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Iran's President, Hassan Rouhani, said the US leader's speech was full of "baseless" accusations against his country.
Mr Trump's decision does not mean the pact will be scrapped - instead it will be forwarded to the US Congress.
It will then have 60 days to decide whether to reimpose sanctions or modify the laws on America's involvement in the pact, known as the Joint Comprehensive Plan of Action (JCPoA).
"We will not continue down a path whose predictable conclusion is more violence more terror and the very real threat of Iran's nuclear breakout," said President Trump.
He said the deal had "many flaws" and warned: "If we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated".
The President also used his speech to criticise Iran's non-nuclear activities, such as its ballistic missile programme, and said it had supported Syria's President Assad and Lebanon's Hezbollah.
Mr Trump said Iran-backed attacks had killed many Americans over the years, and that the country had "harboured terrorists" after the 9/11 attacks.
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The original sanctions on Iran had included a freezing of financial assets, weapons sales and crude oil exports.
Under the restrictions, the country lost more than a hundred billion dollars in oil revenue between 2012 and 2016 alone.
On the implementation of the deal in January 2016, the White House said Iran had completed all steps to ensure its nuclear programme was exclusively peaceful.
This included shipping 25,000 pounds of enriched uranium out of the country, and the dismantling and removing of two-thirds of its centrifuges, used to enrich uranium.
Iranian leader Hassan Rouhani appeared on TV to say the multinational deal could not be revoked by one country.
He said American would be isolated in its actions, and that Iran would redouble its efforts to expand its ballistic missile programme for defence.
"The Iranian nation has not and will never bow to any foreign pressure... Iran and the deal are stronger than ever," said Mr Rouhani.
Theresa May, German Chancellor Angela Merkel and French President Emmanuel Macron also swiftly issued a joint statement.
They said they were "concerned by the possible implications" and "stand committed to the JCPoA and its full implementation by all sides".
"The nuclear deal was the culmination of 13 years of diplomacy and was a major step towards ensuring that Iran's nuclear programme is not diverted for military purposes," the statement added.
The leaders said they shared concerns about Iran's ballistic missile programme and had asked their foreign ministers to "consider with the US how to take these issues forward".
Mr Macron said he had spoken to Mr Rouhani to assure him America's actions would not kill off the deal.
Russia's foreign ministry also called on all sides to stick to the deal, saying Mr Trump's "aggressive" stance on Iran was doomed to fail.
It said Tehran was sticking to its obligations and that there could be no renewal of the previous sanctions.
However, Israeli Prime Minister Benjamin Netanyahu congratulated President Trump for "boldly confronting Iran's terrorist game" and urged other countries to follow his lead.
Saudi Arabia also welcomed the "decisive strategy".