Iraqi soldiers hold an Islamic State flag after gaining control of the Ramadi on January 16. (Photo by Nawras Aamer/EPA)

Iraqi forces have reclaimed strategic territory from the Islamic State (IS) east of Ramadi, opening up several major arteries, including a road that connects the Anbar provincial capital to Baghdad and a major army base nearby.

A military statement broadcast Tuesday on state television said the army, police, and counterterrorism forces had cooperated in their successful recapture of several towns, including the Habbaniya army base where US-led coalition forces are located, about six miles east of Ramadi.

Iraqi security forces reportedly hoisted an Iraqi flag in the center of Hussaibah village to mark their victory.

"All of Ramadi has now been liberated," Anbar Governor Sohai al-Rawi told Reuters.

Iraq's government announced in late December that its forces recaptured Ramadi, but daily fighting has continued on the city's outskirts as troops have tried to clear out lingering pockets of insurgents.

Ramadi fell to the militant group in May 2015 after a wave of 30 suicide car bombings in the city's center. The blasts were so powerful that they took out "entire city blocks," according to a senior US State Department official. Many civilians and Iraqi troops fled after encountering heavy fire from IS fighters.

There are reportedly some militants still camped out in the rural northern districts of the city, but Rawi says he is most concerned that the reclaimed territory might be rigged with explosives.

Watch the VICE News dispatch Retaking Ramadi From the Islamic State: The Battle for Iraq:

"The biggest challenge we are facing is clearing the areas of mines" Rawi said. "Which is now being conducted through modest local efforts." Iraqi officials appealed for international funding to help clear the area of explosives.

Restoring Ramadi to what it once was before it fell to IS forces in 2014 won't come cheap and isn't going to happen anytime soon. UN efforts to make the Anbar capital habitable again — so that more than 180,000 displaced civilians can return — will cost around $50 million, according to Lise Grande, the humanitarian coordinator in Iraq. A large chunk of that will go toward the removal of explosives.

"At the rate that extraction is going with the limited capacity that exists, it will be up to nine months before the area of Tamim is cleared," said Grande, referring to the southern district of Ramadi.

Funding will also be allocated toward rebuilding the healthcare and energy infrastructure in Ramadi, much of which was devastated during years of fighting, including IS bombings and US-led coalition airstrikes.

"Thousands of homes have to be rebuilt, thousands of buildings have to be rebuilt. The total cost of reconstruction in Ramadi is huge," said Grande.

The next challenge for Iraqi forces is to cut the supply route to Fallujah, another remaining IS stronghold in Iraq. IS also holds Mosul, Iraq's second largest city.

Reuters contributed to this report