Telkief, 20 km north of Mosul, was recaptured amid continued efforts by government forces to free the remaining IS-held neighborhoods in northeastern Mosul, Lt. Gen. Abdul-Amir Yarallah, from the Joint Operations Command, said in a statement.
The head of Iraq's elite Counter-Terrorism Service, which has been doing most of the fighting in Mosul, as well as Prime Minister Haider al-Abadi announced Wednesday that the city's east bank had been "liberated".
Iraqi troops are now on the eastern bank of the Tigris River which splits the city to east and west.
"Important lines and important areas are finished. there is only a bit of the northern (front) remaining", he said at a press conference.
As Iraq forces make headway, more advisers have arrived from the US -led coalition assisting government troops.
Patrick Martin, Iraq analyst at the Institute for the Study of War, said the worst may be yet to come.
The west bank of Mosul is a bit smaller but is home to the narrow streets of the Old City - impassable to most military vehicles - and to some of the city's traditionally most dyed-in-the-wool jihadist neighbourhoods.
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The Iraqi military has recaptured eastern Mosul from the Islamic State (IS).
Mosul lies around 350 kilometres (220 miles) northwest of Baghdad in the country's north and had an estimated population of close to two million when IS overran it in early June 2014.
"They lost a lot of fighters, a lot of resources, a lot of vehicle-borne improvised explosive devices and a lot of weapons during the first half of this battle", he said.
He said plans were now being drawn up to retake the western part of the city but did not elaborate on when that part of the operation would begin.
"The city is for all intents and purposes surrounded so they won't be able to resupply or reinforce whatever remains", he explained.
"We haven't seen extremely widespread destruction, we've not seen as many displaced people as the aid agencies were fearing", he said.
The second phase of the battle to retake Mosul - which is led by Iraqi security forces and aided by the Kurdish Peshmerga, a Shiite-led militia, and the USA -led global coalition against the Islamic State - began December 29 after the initial offensive, which began October 17, was suspended. Airstrikes, meanwhile, have attempted to disrupt vehicle bombs inside the city.