"We have nothing to do with this," foreign ministry spokesman Abubakr Al-Siddiq told AFP, adding that the vessel was in international waters.
Israel intercepted the "Klos-C" in the Red Sea between Eritrea and Sudan yesterday, claiming that Syrian-made weapons aboard had been shipped overland to Iran then onward by sea.
According to Israel, the M302 missiles were to have been offloaded at Port Sudan and then taken overland towards Gaza via Egypt's Sinai Peninsula.
Khartoum's links with Iran came under scrutiny after Sudan accused Israel of being behind an October, 2012 strike against the Yarmouk military factory in the Sudanese capital, which led to speculation that Iranian weapons were stored or manufactured there.
But officials in the Jewish state had expressed concern about arms smuggling through Sudan and have long accused Khartoum of serving as a base of support for militants from the Islamist Hamas movement that rules the Gaza Strip.
Iranian warships have periodically docked in Port Sudan, most recently in September, for what Sudan called "routine" visits.