Kuwait also orders the closure of the Iranian military, cultural and trade missions on its soil at a time when the Gulf state is trying to mediate the diplomatic crisis between Qatar and Saudi Arabia and its allies.
Kuwait ordered the Iranian ambassador on Thursday to leave the country within 48 days, Iran's ISNA news agency reported, in an escalating row following a court case which implicated "Iranian parties" in a spy cell.
"Under the pressure of Saudi interventionist policies, and the baseless accusation of Iranian interference ... Kuwait has announced that ... Alireza Enayati, the Iranian ambassador to Kuwait, must leave within 48 days," the Iranian Students News Agency (ISNA) said.
Earlier during the day, Kuwait had ordered the expulsion of about 15 Iranian diplomats after the emirate's top court convicted a "terror" cell of links to the Islamic republic, a government source said.
Kuwait also ordered the closure of the Iranian "military, cultural and trade" missions, said the government official, who asked not to be named.
The Gulf state's supreme court last month sentenced the mastermind of the cell to life in jail and condemned 20 others to various prison terms for alleged links with Iran and Lebanese militia group Hezbollah as well as plotting terror attacks in Kuwait.
State Minister for Cabinet Affairs Sheikh Mohammad Abdullah al Sabah, who is also acting information minister, confirmed that Kuwait had taken diplomatic action against Iran but declined to specify the measures.
"Following the supreme court ruling on the case ... the government of Kuwait has decided to take measures, in accordance with diplomatic norms and the Vienna Convention, towards its relations with the Islamic Republic of Iran," Sheikh Mohammad said.
He provided no further details.
The Kuwaiti newspaper Al Seyassah reported on Monday that 14 of the cell's 26 members had fled to Iran by sea.
They were convicted by a lower court early last year but acquitted on appeals several months later and set free.
The supreme court, whose rulings are final, overturned their acquittal on June 18 and sentenced them to between five and 15 years in prison.
Kuwait's interior ministry confirmed on Tuesday that the 14 men were on the run but it said that they had not left the country through official exit points.
The cell was busted in August 2015 and large quantities of arms, ammunition and explosives were seized from them, according to the Kuwaiti authorities.
Kuwaiti courts convicted them of working for Iran's Revolutionary Guards and Lebanese Shia militia Hezbollah. They were also convicted of smuggling explosives from Iran.