Iranian clubs Esteghlal and Shahr Khodro agreed Thursday to play the home legs of their Asian Champions League preliminary round ties at neutral venues, backing down on a boycott threat.

Tehran giants Esteghlal will now play Tuesday night's postponed fixture against Kuwait SC in the United Arab Emirates on Saturday, Iranian media reported.

"Esteghlal club announced it will go to Dubai to face Kuwait SC on Saturday ... meaning they have accepted playing in a neutral country," semi-official news agency ISNA reported.

Mashhad club Shahr Khodro confirmed that it too had agreed to a neutral venue and would play its delayed preliminary round home leg against Bahrain's Riffa SC in Dubai on Saturday, ISNA said.

The clubs are among four Iranian clubs that qualified for this year's Asian Champions League, alongside Estghalal's Tehran rivals Persepolis and Sepahan of Isfahan.

All four had threatened to boycott the tournament unless they could host their home legs in Iran.

ISNA reported that a compromise had been reached in talks between the clubs and the AFC in Malaysia.

Esteghlal manager Esmail Khalilzadeh told the news agency an "agreement" was reached that was "good news" for the clubs, but he did not go into details.

ISNA said the deal entails "the home legs of the Asia Champions League's group stage being played in Tehran, Isfahan and Mashhad."

The AFC said the preliminary round home legs were "moved to neutral venues because of ongoing security concerns and the decision of several governments to issue travel warnings to the Islamic Republic of Iran".

Iran's government has accused the AFC of bias.

Tensions have soared between the West and Iran following the killing of top commander Qasem Soleimani in a US drone strike in Baghdad on January 3.

Iran retaliated five days later by launching a wave of missiles at US troops stationed in neighbouring Iraq.

Tehran was still on high alert hours later when its air defences mistakenly shot down a Ukraine International Airlines Boeing 737, killing all 176 people on board.