Icelandic daily Morgunbladid said a newly-built whaling ship, Hvalur 9, had killed a large fin whale and brought it in to a landing station on Sunday.
Rune Froevik, a spokesman for the Norwegian-based High North Alliance representing Arctic fishing communities, told news agency AFP the whale measured about 20 metres and was caught west of Iceland.
"This is the first fin whale that has been killed since they announced the return to commercial whaling," Mr Froevik said.
The fin whale is the second largest species of whale after the blue whale.
Iceland announced on Tuesday it had authorised its whalers to hunt 30 minke whales and nine fin whales through August 2007 for export, thereby making it only the second country after Norway to completely defy a 1986 moratorium on commercial whaling.
The decision has sparked protests from environmental groups such as Greenpeace and a number of countries, including Australia, New Zealand and the European Union.
But Mr Reykjavik has argued that "none of the planned catches involve any endangered or threatened stocks of whales.
"They only involve abundant stocks and are linked to Iceland's overall policy of sustainable utilisation of marine resources," the fisheries ministry said.
According to estimates agreed on by the International Whaling Commission
(IWC), there are close to 70,000 minke whales in the central North Atlantic, of which around 43,600 are in Icelandic waters.
Fin whales in the central North Atlantic number around 25,800.
Mr Froevik said that while minke and fin whales appear on a list of species threatened with extinction drawn up by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the stocks around Iceland are strong enough to sustain the country's whaling quota.
"The stocks are not endangered ... It's a lie from beginning to end. It's just propaganda" from anti-whaling nations, he said.
Iceland slammed
Australia's environment minister said Iceland was "sticking two fingers in the air" to the rest of the world by resuming commercial whaling.
"This is not just sticking a harpoon into a species that's endangered," said Senator Ian Campbell.
"This is really sticking two fingers in the air at the entire global community, the entire international, environmental institutional arrangements."
"You wonder how Iceland could be a member of the global community with an act like this," Mr Campbell told reporters. "They can't be taken seriously on any environmental issue in the future."
Australia has been at the forefront of a campaign to stop the resumption of commercial whaling and has declared a whale sanctuary in a large swathe of the Southern Ocean that it considers to be its Antarctic territory.