A video emerged in January showing two employees at a facility in Karaj violently assaulting a child laborer before forcibly dragging him into their vehicle.
The head of the facility and a security guard were detained, Iran's Welfare Organization, a government body said on Thursday.
"A child named Maroof, a resident foreign national, attempted to escape with a serrated knife after being locked outside a small gate while staff were tending to the yard," the organization said in a statement.
"Upon his return to the facility, security personnel sought to retrieve the knife, but the child was beaten during his attempt to flee again," it added in a statement.
Eight children were transferred to another facility, Iran's domestic media reported following the center's closure.
Iran's Welfare Organization hosts orphans and disadvantaged children, many of whom beg and work menial jobs, at centers throughout the country.
The abuse of child laborers in Iran has been a persistent rights issue in recent years as standards of living have dropped and migrant numbers have increased.
The incident followed a similar incident in November 2020, when another online video appeared to show a man coercing two child laborers working as fortune tellers to dance and expose themselves in exchange for money.