The company quit the Islamic republic after international banking sanctions were imposed on Tehran as punishment for its disputed nuclear programme.
At an auto industry conference and exhibition in the Iranian capital, Jean Christophe Quemard, PSA's operations director for the Middle East, told delegates the company wanted to return.
"We are in intense discussions," he said.
"We have a long relationship with Iran. We have the strong will to create a joint venture covering the entire automotive chain as soon as possible."
The United States added sanctions on the Iranian auto industry in 2013 but those have been lifted under an interim deal between Iran and world powers on its nuclear activities.
Iran was formerly Peugeot's second largest market by volume and one in four cars in the country carries the Lion brand.
Discussions between Peugeot and its former joint venture partner, Iran Khodro, began at the Paris Auto Show in October.
Total car production in Iran was 1.6 million in 2011, but by two years later with sanctions biting it had halved.
The organisers of Monday's auto conference want to attract foreign investment -- with a population of 77 million the Iranian market is seen as untapped -- but the conditions of a partnership are likely to change.
Under new joint deals, the industry ministry wants 40 percent of production to take place in Iran in the initial phases, rising to 85 percent after five years.
Iran's Industry Minister Mohammad Reza Nematzadeh said Monday that the country aims to reach a total production figure of three million cars by 2020.
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