A triumphant Iraqi Prime Minister Haider al-Abadi declared on Monday that the coming year would see his forces defeat Islamic State, after his military achieved its first major victory since collapsing in the face of the fighters 18 months ago.

Iraqi forces flew the national flag above the main government complex in Ramadi earlier in the day, declaring they had recaptured the city, a provincial capital west of Baghdad, which fell to Islamic State in May.

"2016 will be the year of the big and final victory, when Daesh's presence in Iraq will be terminated," Abadi said in a speech broadcast on state television, using an Arabic acronym for Islamic State that the hard-line group rejects.