The agreement was signed last December with the major bus maker in Semnan Province.
Each bus costs 15 billion rials ($115,000), making the purchase worth 3 trillion rials ($23 million) in total.
The new buses will operate immediately in the metropolis' crowded parts, Ali Asghar Kamalizadeh, the mayor of Karaj told ISNA on Wednesday.
There are hardly 400 buses in the Karaj public transport fleet -- by no means enough for a city of 1.6 million people. In that most of the vehicles are old and spew poison into the air is a different matter, Financial Tribune quoted him as saying.
Kamalizadeh said 10 years ago 1,300 buses were operating in the expanding city west of the capital.
"Since then the vehicles have been retiring from the fleet one after the other because public buses should normally be in use for eight years at best."
Blaming both on mismanagement and lack of funds, he said not a single new bus was added to the Karaj public transport system in the past decade.
Observers have said Alborz residents are losing interest in using public transportation due to the constant delays, not to mention the terrible contribution of the rickety vehicles to air pollution.
He hoped that the new buses will help revive the dilapidated fleet and ease the worsening air pollution.
On average, 2.5 million trips are made by vehicles in Karaj every day, of which public transportation share is hardly 4%.