The Israeli firm has already made inroads in beverage fortification and introduced a range of B vitamins into fizzy drinks earlier this year, which overcame the vitamin solubility issue.
This move will help companies target the growing problem of iron deficiency with palatable solutions.
The World Health Organization considers iron deficiency as one of the major nutritional disorders in the world.
As many as 80 per cent of the world's population may be iron deficient, while 30 per cent may have iron deficiency anaemia.
According to the United Nations World Food Programme, iron is estimated to impair the mental development of 40-60 percent children in developing countries.
The fortification would be ideally suited to groups who may be more at risk of low iron levels, such as pregnant women, infants and toddlers, and people with gastrointestinal disorders that impede the absorption of iron.
LycoRed said the difficulties in fortifying foods with iron has limited the foods which it could be added to.
Vice president Udi Alroy said: "With our advanced iron formulation fortified foods retain their great taste and color and maintain their shelf life.
"The biggest challenge with iron is the ability to offer meaningful levels of fortification.
Our new iron formulation allows us to fortify dairy products with up to 30 per cent of the RDI for iron.
This is important because our experience in product innovation tells us that consumers are aware of the health benefits of iron, and are looking for foods that provide them with levels that can deliver those health benefits."
The new iron formulation is approved for use in Europe and is on the EU Positive List.
It can be used to fortify yoghurt, dairy based smoothies, milk drinks, bakery products, and nutrition bars.
The firm has also developed a "meal replacement" yoghurt smoothie, which contains a range of vitamins and minerals.
In September the firm said a range of its vitamin B complex will be launched in a line of carbonated drinks.
The B complex includes B5, B6, B12 and folic acid and was added to three different flavoured drinks in the Lightly Sparkling Schweppes line by Yafora, launched in the company's home town.