The company through which the dealers have been operating has been named as R.S.P. Rebuilt Spare Parts, based in northern Israel, Israel's Channel 10 reported.
Owned by Avichai Weinstein and Eli Cohen, R.S.P. Rebuilt Spare Parts was suspected multiple times before of trying to violate the arms embargo against Iran by selling spare parts for F-4 Phantom jets.
Earlier attempts to violate the embargo against Iran were carried out through the US, Germany, Thailand and Portugal, the report said.
He had been under house arrest in the US and paid hundreds of thousands of dollars in fines, but Israeli authorities were unable to prove Iran was the final destination for the shipments.
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The arms dealer was released from house arrest and had his license to sell arms restored, although he is still being investigated, according to the report.
The current case was brought to light this week by Greek media, which reported that a secret probe conducted by the US Homeland Security Investigations agency and Greece's Financial Crimes Squad found that the operation was carried out in two stages, in December 2012 and in April 2013.
Israel has been waging diplomatic battle against Iran's controversial nuclear programme. Tel Aviv considers Tehran as a threat and has been pushing for severe sanctions against the Islamic Republic to deter it from its pursuit of acquiring a nuclear bomb.