STORY: A Reuters witness saw a man from inside the embassy throwing papers in a rusted barrel, with flames illuminating the walls of the three-story building.
A black Audi with diplomatic car plates and darkened windows was seen going in and out as a police officer guarded the entrance.
In a rare video address on Wednesday, Albania's Prime Minister Edi Rama said he had ordered Iranian diplomats and staff to close the embassy and leave the country within 24 hours.
Rama said the July cyberattack "threatened to paralyze public services, erase digital systems and hack into state records, steal government intranet electronic communication and stir chaos and insecurity in the country."
Washington, Albania's closest ally, also blamed Iran for the attack and promised to "take further action to hold Iran accountable for actions that threaten the security of a U.S. ally."
Tehran has strongly condemned Tirana's decision to cut its diplomatic ties, calling Albania's reasons for the move "baseless claims".
Albania and Iran have had tense relations since 2014, when Albania accepted some 3,000 members of the exiled opposition group People's Mujahideen Organization of Iran, also known by its Farsi name Mujahideen-e-Khalq, who have settled in a camp near Durres, the country's main port.
On Thursday (September 8) morning, it appeared calm outside the embassy in Tirana located just 200 yards from the prime minister's office.