In a session broadcast live on state radio, 176 lawmakers voted against and 74 for the no-confidence motion which accused Roads and Urban Development Minister Abbas Akhoundi of mismanagement after a railroad collision and over alleged lack of transparency in the plane purchases.
Akhoundi helped steer Iran's move to sign contracts with Airbus and US rival Boeing last year to purchase about 180 passenger planes, the first direct deal by Tehran to buy Western-built aircraft in nearly 40 years.
Last week, Akhoundi announced that Iran had also finalised a deal to purchase 20 turboprop aircraft from Franco-Italian ATR .
The plane purchases were made possible by a deal between Tehran and world powers to lift sanctions against Iran in return for curbs on the country's nuclear activities.
‘We negotiated directly with Boeing, Airbus and ATR in Tehran and under the scrutiny of watchdog bodies,’ Akhoundi said.
‘Our airports have become plane cemeteries ... and I have been committed to renewing our fleet without using government funds.’
In 2015, Akhoundi defeated another motion by hardliners in parliament to remove him from office.