Iran is using the billions in cash resources provided under the landmark nuclear deal to engage in an unprecedented military buildup meant to transform the Islamic Republic's fighting force into an "offensive" juggernaut, according to a largely unreported announcement by Iranian military leaders that has sparked concern among U.S. national security insiders and sources on Capitol Hill.

Iranian officials announced late last month that Iran's defense budget had increased by 145 percent under President Hassan Rouhani and that the military is moving forward with a massive restructuring effort aimed at making it "a forward moving force," according to regional reports.

Iranian leaders have stated since the Iran deal was enacted that they are using the massive amounts of cash released under the agreement to fund the purchase of new military equipment and other armaments. Iran also has pursued multi-million dollar arms deals with Russia since economic sanctions were nixed as part of the deal.

Leading members of Congress and U.S. officials working on the Iran portfolio suspect that at least a portion of the Obama administration's $1.7 billion cash payment to Iran has been used to fund and support terrorists in the Middle East.

The latest disclosure about Iran's military buildup is further fueling concerns that U.S. cash assets returned to the country—which were released with no strings attached by the Obama administration—are helping Iran pursue a more aggressive military stance against U.S. forces in the region.

"President Obama flat-out caved in to Iran when he handed them the disastrous nuclear deal and $1.7 billion in cash payments that could assist Iran's military," Rep. Sean Duffy (R., Wis.), an opponent of the nuclear deal, told the Washington Free Beacon. "So it's no surprise that the world's lead sponsor of terrorism would feel emboldened to become more aggressive in the region and flex its military muscle."

Iranian Brigadier General Kiumars Heidari announced the military buildup during Iran's annual Army Day. While the announcement did not grab many headlines in the Western media, national security insiders have been discussing the announcement for weeks, according to conversations with multiple sources.

Iran's goal is to turn its army into an "offensive" force, a major shift from its historic role as a support agent for the Iranian Revolutionary Guards Corps, or IRGC, Iran's extremely well funded primary fighting force.

Iran hopes to revamp its army from top to bottom, including improving logistical capabilities, weaponry, and other armaments.

Mahan Abedin, an Iran analyst writing in Middle East Eye, described the announcement as a major shift in Iranian military policy that would allow the Islamic Republic to intervene in the Persian Gulf region, where the U.S. military has a significant presence.

"This is a major policy announcement with far-reaching consequences for foreign policy and internal defense-related power dynamics," Abedin wrote. "If implemented properly, Heidari's proposed modernization policy would not only radically alter Iranian defense doctrine, but just as importantly, it would also reverse the army's subservient relationship to the Islamic Revolutionary Guard Corps (IRGC)."

Michael Rubin, a former Pentagon adviser and expert on rogue regimes, told the Free Beacon that it should come as no surprise that Iran is diverting the cash it received under the nuclear deal to its military industry.

The disclosure comes as "no surprise to anyone who studied Iran" and should have been anticipated by the Obama administration, which largely sought to downplay the importance of giving Iran billions in cash resources, Rubin said.

"First, there's history: Between 1998 and 2005, European Union trade with Iran more than doubled and the price of oil quintupled," Rubin explained. "Iran took that hard currency windfall and invested the bulk of it in its nuclear and missile programs. The person coordinating Iran's strategy? Hassan Rouhani who was at the time secretary of Iran's Supreme National Security Council."

"Obama and Kerry might as well have wired the money directly into the accounts of those seeking to enhance Iran's military, kill Sunnis, or sponsor terrorism," Rubin said.

One senior congressional source tracking the matter expressed concern about the safety of U.S. forces in the region, which already are routinely harassed by Iranian military personnel.

"This is certainly grounds for concern," the source said. "An Iranian military buildup coupled with an offensive posture is a threat to the United States and our allies. This also serves as an important reminder of why the Obama administration's cash infusion to Iran was so dangerous."

The cash windfall provided by the United States and European countries is "fungible and hence can be used for everything from sponsoring terror proxies to developing ballistic missiles," the source warned. "Congress will continue to take action to counter Iranian terrorism and ensure this regime never acquires a nuclear weapon."

Iran's military announcement has already sparked a renewed push on Capitol Hill to reimpose economic sanctions on Iran.

"The Iranians know that the party will end this fall, when Congress will pass bipartisan legislation that begins to roll back Iran's military growth," one senior congressional adviser working on the sanctions effort told the Free Beacon.

"The Obama administration avoided any serious action for years, and so Iran kept growing its arsenal and using it against our allies, against Syrian civilians, and increasingly against our military," said the source. "Now they're rushing to accomplish as much as they can before Congress and the Trump administration get around to reversing Obama's policies."