Jassem Nouri, who had also served as a military adviser in Syria, was killed on Thursday, Iran's official IRNA news agency reported.
Political and military leaders joined family members for a memorial service in Ahvaz in southwestern Iran on Sunday ahead of his burial on Monday.
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"A seasoned (1980-88) Iran-Iraq war commander, Jassem Nouri was there as a military adviser to share his experience with the resistance fighters in Iraq," the city's Friday prayer leader Qassem Khaziravi told mourners.
Shiite Iran has provided weapons and military advisers to both Iraq and Syria but denies it has deployed any combat troops.
Ramadi is the capital of Anbar, an overwhelmingly Sunni province west of Baghdad, and the government of Prime Minister Haider al-Abadi had previously avoided deploying Iran-backed Shiite militias to the area.
But the city's fall to the Sunni extremists of IS two weeks ago forced a change of policy.
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