Nilforoushan, a general in Iran's Revolutionary Guards, was killed in an Israeli strike on Beirut alongside Hezbollah chief Hassan Nasrallah.
The funeral procession for the slain Iranian general began at the Imam Hossein Square in central Tehran Tuesday morning, according to a live broadcast on state television.
Qaani -- who heads the Quds Force, the Revolutionary Guards' foreign operations arm -- had disappeared from public view and was rumoured in some media to have been targeted in an Israeli strike on Lebanon.
He appeared Tuesday at the funeral, clad in the Guards' green military uniform.
Nilforoushan's casket was paraded through the packed streets of Tehran after a funeral ceremony at Imam Hossein Square in the city centre.
Thousands attended the funeral procession, many of them carrying yellow Hezbollah banners and Iranian and Palestinian flags and chanting "Death to Israel".
Memorial services were held for Nilforoushan in Iraq on Monday.
His remains will be taken to a another farewell ceremony in Tehran later in the day before leaving for another procession in Qom, south of Tehran.
He will be laid to rest in his hometown Isfahan on Thursday after being taken to the holy city of Mashhad for another ceremony on Wednesday.
Iran's foreign ministry said Monday the Islamic republic would use "all its capacities" to bring Israel to account over the deaths.
On October 1, Iran launched 200 missiles on Israel in retaliation for the death of Nilforoushan and Nasrallah, in its second-ever direct attack on its arch-foe.
The attack was also in retaliation for Hamas chief Ismail Haniyeh, who was killed in July while he was in Tehran to attend an inauguration ceremony for Iran's president.
Israel has vowed to retaliate for the missile attack, with Israeli Defence Minister Yoav Gallant saying Israel's response will be "deadly, precise, and surprising".
Iran has in recent days engaged in high-level diplomatic talks around establishing a ceasefire in Lebanon and Gaza, as well as ways to prevent the conflict from spreading across the region.
On a visit to Baghdad, Foreign Minister Abbas Araghchi on Sunday said that Iran was "fully prepared for a war situation", but added that "we do not want war, we want peace".
In April Tehran had fired a volley of missiles and drones at Israel in retaliation for a deadly strike on Iran's consulate in Damascus, blamed on Israel.
