The commission will be made up of five independent judges, none of whom will be from either Argentina or Iran.
Argentine courts have blamed Iran for the attack, which killed 85 people. Iran has always denied any involvement.
Israel said it was "surprised" by news of the commission.
Foreign ministry spokesman Yigal Palmor told the AFP news agency that they were waiting "to receive full details" from Argentina.
Iran agreed last July to cooperate with Argentina in the investigation, which it said "was going down the wrong way".
Such negotiations have alarmed Israel and Argentina's sizeable Jewish community, who fear Argentina is weakening in its resolve to put suspects on trial.
"We warned the Argentines from the start that the Iranians would try to set a trap for them and that they should beware," Mr Palmor was quoted by the AFP as saying on Monday.
High-profile suspect
Argentine President Cristina Fernandez de Kirchner called the agreement "historic".
"It guarantees the right to due process of law, a fundamental principle of international criminal law," Ms Kirchner said.
She said Argentine Foreign Minister Hector Timerman and his Iranian counterpart had signed a memorandum of understanding on the sidelines of an African Union summit in Addis Ababa, in Ethiopia.
It still has to be ratified by the parliaments of both countries.
The commission will "analyse all the documentation presented to date by the judicial authorities of Argentina and Iran", Ms Fernandez said on her Twitter account.
According to Mr Timerman, the agreement will make it possible for Argentine legal officials to question Iranian suspects in Tehran.
Among the suspects named by Argentine prosecutors when they made their case in 2007 is Iran's current Defence Minister, Gen Ahmed Vahidi.
At the time of the attack, Gen Vahidi was the commander of a special unit of Iran's Revolutionary Guard.
Argentine prosecutors said Iran planned and financed the attack, and that the Lebanese militant group Hezbollah carried it out.
No-one has been convicted of the car bombing which destroyed the seven-storey cultural centre.
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