E-cigarettes have now been hailed "a great blessing" for the country's overall public health.
Doctors have thanked Iceland's tobacco control policies for its continued success in seeing smokers quit cigarettes by promoting vaping instead.
Anti-tobacco campaigner and well-respected Italian doctor Riccardo Polosa said in a statement on social media site Twitter of the news this week: "This is a clear example that when the existing #tobaccocontrol policies are integrated with the promotion of #vaping extraordinary results can be achieved in terms of #publichealth."
In 2014, 35,000 Icelanders self-identified as smokers - comprising 14% of the population - just three years later in 2017 and thanks to a steady rise in vaping, numbers have dropped by 40 percent to 22,000.
"Smoking has been falling like a rock like we'e never seen before," top Icelandic doctor Gumundur Karl Snarnsson said. "The biggest contributing factors have been mouth tobacco and vaping, which have clearly been wiping smoking out."
Iceland currently has no clearly defined laws about the contents, sale and distribution of vaping products.
A bill that set limits to the nicotine strength and quantities of vape juice, similar to those specified by the EU's Tobacco Product Directive, was introduced last year, but it was so strongly opposed by consumers and vape shop owners that it was eventually dismissed.
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