National security adviser General Michael Flynn delivers a statement daily briefing at the White House in Washington US, February 1, 2017. [Photo/Agencies]

The sanctions are expected to be levied as early as Friday. Up to two dozen Iranian individuals, companies and possibly government agencies could be penalized.

The sanctions come on the heels of the Trump administration's warning that it was putting Iran "on notice" after the missile test.

Mark Dubowitz, CEO of the Foundation for Defense of Democracies, says the US has been consulting with allies in Europe and elsewhere on the matter. Dubowitz says he has been advising the administration and Congress on Iran issues.

The US officials insisted on anonymity because they were not authorized to publicly discuss the upcoming sanctions.