UPDATE: 3:30 pm IST: Iran released the ten US sailors who had been detained on Tuesday, Iran's Revolutionary Guards said on Wednesday, according to AFP.
UPDATE 2:31 pm IST: The Islamic Revolutionary Guards have said in an address on state television that it "won't take long" to release the 10 US sailors who had been detained on Tuesday after their Navy ships entered Iranian waters.
Admiral Ali Fadavi, Iran's naval commander, said that the trespassing by the American sailors was "not hostile or for spying purposes", AFP reported.
The Iranian Guards said that a broken navigation system led the ships close to Iran.
UPDATE 12: 34 pm IST: Iran's Revolutionary Guards called reports about the prompt release of the detained American sailors 'speculation', an Iranian news agency reported.
"What others say about the sailors' prompt release is their speculation, and I don't confirm or deny it," Ramazan Sharif, spokesman for the Revolutionary Guards, told Tasnim news agency, according to Reuters.
UPDATE 11: 35 am IST: The Islamic Revolution Guards Corps said in a statement on Wednesday that the American crew had been taken to the Farsi island and that they will be "treated well according to the Islamic Law."
The Revolution Guards also said that US aircraft carrier USS Harry S Truman was present close to the place from where the US ships were seized, Iran's Islamic Republic News Agency reported.
Iran stopped two US Navy ships in the Gulf on Tuesday and detained 10 American sailors, including a woman. However, Iran has assured the Pentagon that they will release the sailors on Wednesday.
Iranian media reported that the two small crafts were at least two kilometres inside the country's waters near the Farsi island when they were detained by the Revolutionary Guards. The crew reportedly faced mechanical trouble that led the ships to drift, according to The Associated Press.
Pentagon officials said that the American crew will be released to a US Navy vessel, the agency reported.
The incident comes weeks after the United States accused Iran of firing rockets close to its warships.
The US media had reported that Iranian rockets had come about 1,500 metres close to US warships, including the aircraft carrier USS Harry S Truman, when they were entering the Gulf on 26 December.
However, Iran dismissed the reports and claimed that that no such live fire exercise was conducted at the time.
The US then released footage that showed a rocket being fired from a close distance of three ships.
Tensions between Iran and the US have risen in recent months despite the two countries agreeing to a historic nuclear deal last year.
Iran is expected to get some sanctions lifted this week in accordance with the nuclear deal.