Tal Afar is the latest objective in the US-backed war on the jihadist group following the recapture in July of Mosul, where it declared its self-proclaimed caliphate over parts of Iraq and Syria in 2014.
Tal Afar was cut off from the rest of IS-held territory in June and the campaign to recapture it started on August 20, when up to 2,000 militants were believed to be defending it against around 50,000 attackers, according to western military sources.
"Tal Afar city is about to fall completely into the hands of our forces, only five per cent remains" under Islamic State control, an Iraqi military spokesman told Reuters.
Elite forces had liberated the heart of the city "and raised the national flag on top of the citadel building", a statement from the Iraqi joint operations command said on Saturday.
Much of the Ottoman-era building was destroyed by the militants in 2014.
Such a quick collapse of Islamic State in the city, which has been a breeding ground for jihadist groups, would confirm Iraqi military reports that the militants lack command and control structures west of Mosul.
Fighters of Hashed Al-Shaabi wave an Iraqi flag and hold another one bearing the logo of lS as Iraqi forces advance inside the town of Tal Afar, west of Mosul. Source: AAP
A Reuters visuals team in Tal Afar said fighting had eased on Saturday, with just occasional artillery rounds heard. There were no sign of civilians in two neighbourhoods it visited.
"God willing, the remaining part will be liberated soon," Iraqi Foreign Minister Ibrahim al-Jaafari said earlier at a news conference with his French counterpart, Jean-Yves Le Drian, and French Defence Minister Florence Parly, in Baghdad.
A map published by the joint operations command showed all of Tal Afar under army control barring one neighbourhood on the northeast side where fighting was continuing.
The city, which had a pre-war population of about 200,000, lies on the supply route between Syria and Mosul, 80km to the east.
Mosul's collapse effectively marked the end of Islamic State's "caliphate", but the group remains in control of territory on both sides of the Syrian-Iraqi border, and of Hawija, a city between Mosul and Baghdad that Iraqi officials said would be the next target.
