Pay Monthly customers can unlock their iPhone at any time free of charge. However, if you unlock your handset and place a non-O2 sim into it, you will still have to honour the remainder of the minimum term on your contract.
For iPhone on Pay & Go, unlocking can take place 12 months after you've bought your iPhone for a one-off £15 fee which will be deducted from your airtime balance.
To unlock your iPhone, first complete the unlocking form - it will take up to 14 days for the iPhone to be unlocked and O2 will text you to confirm the unlock request. Then place a non-O2 sim into the iPhone and connect to iTunes via a USB cable. iTunes will confirm that the iPhone has been successfully unlocked.
O2 also provides a FAQs section for those having trouble unlocking iPhones.
O2 boss Matthew Key, chairman and chief executive officer of Telefónica Europe recently denied reports that the company wouldn't offer the service.
"There is absolutely no truth in that rumour. Once the iPhone becomes available on other UK networks, we will allow O2 customers to unlock their iPhones, although of course they will still need to honour any outstanding contract period they have," Key told The Times.
"At the end of their contract period, they are entirely free to move to another operator - though naturally we hope they won’t want to!"
Apple's iPhone is now available in the UK from Orange in addition to O2. Vodafone plans to offer the handset next year.