Mohammad Javad Azari Jahromi said the satellite carrier rocket failed to reach "necessary speed" in the third stage, though it successfully passed the first and second stages of the launch.
Earlier in January, US State Secretary Mike Pompeo warned that if Tehran went ahead with its plans to carry out three space launches in coming months, Iran would face more economic and diplomatic pressure.
The US top diplomat said there was no difference between the technology used to send out satellites or missiles into space.
He said the launch violates a 2015 UN Security Council Resolution urging Iran not to work on ballistic missile technology for eight years.
After the launch, Secretary of State Mike Pompeo repeated his allegation that Iran's space program could help it develop a missile capable of carrying a nuclear weapon to the mainland USA, criticism that comes amid the Trump administration's maximalist approach against Tehran after withdrawing from the nuclear deal.
Washington says the Iranian space launches violate the resolution.
There have been multiple warnings by high-ranking Israeli officials of Iranian ally Hezbollah stockpiling weapons, and of Iranian elite troops training and leading Syrian military personnel for a confrontation with the Jewish state. The Iranian-built satellite would have collected environmental data to improve the country's forecasting abilities. Iran's next satellite scheduled for a launch is the Doosti ("friendship" in Farsi).
Another satellite named Doosti is waiting to be launched, Azari-Jahromi tweeted. Given the facility's launching corridor, the satellite likely fell in the Indian Ocean.
"The Payam satellite was successfully launched this morning aboard the Basir satellite carrier".
"The satellite is part of a civil project with purely scientific aims", foreign ministry spokesman Bahram Ghasemi told the semi-official ISNA news agency. This year will mark the 40th anniversary of the revolution amid Iran facing increasing pressure from the United States under the administration of Trump.
He did not give a date for the launch but said the satellite was meant to orbit the earth at an altitude of 250 kilometres (156 miles).
"We are not scared by the enemies' plots and will overcome the existing problems", Iranian President Hassan Rouhani declared on Monday, according to Radio Farda, a component of Radio Free Europe/Radio Liberty.
The 40th anniversary falls in February.
Iran had planned to send two satellites, Payam and Doosti, into the orbit.