State Department spokesman John Kirby on Friday defended the government's decision to withhold a $400 million payment from Iran until the country released its American hostages.

"This was Iran's money," Kirby said during an appearance on MSNBC. "It was money they were going to get back anyway."

Kirby admitted the payment had been used as "leverage" to free the Americans being held by Tehran, adding that "we make no apologies" for reaching the controversial arrangement.

"To the degree there was a quid pro quo, [it] was: they got their principal back and we got a much more advantageous payment schedule," Kirby said.

The administration has said the U.S. owed Iran that money from a 1979 arms deal that was never completed, but for which Iran paid up front. But because it was repaid just as Iran released U.S. hostages, Republicans have said it amounts to a ransom payment that should not have been paid.

Reports from the Wall Street Journal over the past several weeks had raised questions about the timing and circumstances surrounding the cash payment to Iran, forcing the State Department and the White House to deny, initially, any connection between it and the release of the hostages.

"This wasn't some nefarious deal," Obama said on Aug. 4. "We were completely open with everybody about it."

"We do not pay ransom for hostages," Obama added.

The State Department similarly denied that the administration had misled the public on the nature of the payment. "Reports of link between prisoner release & payment to Iran are completely false," Kirby tweeted on Aug. 3.

But Kirby admitted Thursday during the agency's daily briefing that the cash transfer to Iran was contingent upon the safe release of American hostages, a reversal of the administration's statements about the deal up to that point.

Kirby argued the negotiations to resolve the outstanding debt from a botched 1979 deal were conducted separately from talks about freeing the captive Americans.