Despite repeated warnings, Iran and its proxies have launched numerous attacks against US personnel and its allies for nearly a year. The attack on the US embassy was the last straw.
The decision to unfreeze security aid is a sign of thawing relations between Washington and Islamabad.
Nangarhar residents are enjoying a return to peace in the region after ISIS was ousted through a joint effort of public uprising forces and government troops.
Punjab Province, once afflicted by sectarian violence, has not seen a single terrorism incident involving sectarianism over the past three years, a security official said.
Officials say Tehran backs Sipah-e-Muhammad Pakistan, Sipah-e-Sahaba Pakistan, Zainabiyoun Brigade and other Shia groups in a bid to extend Iranian influence in the region.
The move is part of the government's efforts to meet requirements to stamp out terror financing and money laundering.
ISIS-K, which refers to its Khorasan branch, has claimed a number of attacks in Pakistan via its propaganda outlet Amaq but nearly every one was later disproved.
The news is the latest publicly admitted violation of Iran's commitments to a 2015 international accord.
Thousands of protesters are expected to reach Islamabad October 31.
Friday prayers at the area's main mosque symbolise the return to normality after security forces drove out militants.