And while it has played a handful of friendly games in Basra - including an exhibition game against Saudi Arabia last month - the country has been starved of proper worldwide games for nearly three decades.
"We are going to have our first World Cup with video assisted refereeing", Infantino told reporters after a meeting of the Fifa Council.
The match in Basra was watched by Asian Football Confederation head Salman bin Ibrahim Al Khalifa who said the time had come to end the three-decade ban.
But FIFA has not yet approved an application by Iraq to host matches in the capital Baghdad.
Yesterday's decision followed an global friendly between Iraq and Saudi Arabia in Basra on February 28, their first on Iraqi soil in 40 years.
On March 21, Iraq is set to host Qatar and Syria for one such friendly tournament in Basra.
Video assistant referees (VARs) will be used at the World Cup for the first time when the finals get underway in Russian Federation in June, Fifa president Gianni Infantino said on Friday.
He welcomed the decision on Saturday.
United States college student missing in Bermuda
Joe's, was scheduled to leave the island Sunday. "He was last seen at Dog House on Front Street at 12am this morning". She thanked the citizens of Bermuda and the police for "standing shoulder to shoulder with us during this ordeal".
"This is a significant moment in shaping the future of football in Iraq", he said in a statement.
A US-led invasion toppled Saddam in 2003, but the ban has stayed in place due to uncertainty and instability in the country which has battles civil war as well as IS occupation in parts of the north and west from 2014 until past year.
Federation Internationale de Football Association imposed a ban on worldwide matches upon the Iraqi invasion of neighboring Kuwait, a two-day operation that instigated what became known as the Gulf War under former leader Saddam.
He said the tests had "provided us with guarantees and concrete facts that VAR definitely helps referees and it will help us have a fairer and more transparent sport".
"In these three cities, global matches will be allowed to be played as far as Federation Internationale de Football Association is concerned", Infantino told reporters.
For years, Iraq has been busily building stadiums and pressurising stars and the sport's governing bodies to help them return to the global fold.
The decision means Australian national teams could travel to Iraq the next time the countries meet, with both sides AFC members.
Iraq has been forced to play its home matches in Iran, Jordan or Doha.