An Iraqi soldier holds an Islamic State flag during a battle with Islamic State militants, north of Mosul, Iraq.

An Iraqi military parade celebrating final victory over Islamic State is underway in Baghdad's heavily fortified Green Zone, an Iraqi military spokesman told Reuters on Sunday.

Prime Minister Haider al-Abadi declared final victory over Islamic State on Saturday after Iraqi forces drove its last remnants from the country, three years after the militant group captured about a third of Iraq's territory.