The Iraqi army says its soldiers have recaptured Nimrud, the site of an ancient Assyrian city south of Mosul overrun by Islamic State militants two years ago.

"Troops from the Ninth Armoured Division liberated Nimrud town completely and raised the Iraqi flag above its buildings," Lieutenant-General Abdul-Amir Raheed Yar Allah said in a military statement.

"The enemy suffered heavy casualties."

The town of Nimrud lies one kilometre west of the ruins of the old city.

The soldiers also captured the village of Numaniya, on the edge of the city which was once the capital of an Assyrian empire stretching from Egypt to parts of modern-day Iran and Turkey.

The late discovery of treasures in Nimrud's royal tombs in the late 1980s was one of the 20th century's most significant archaeological finds.

Lieutenant-General Allah, the commander of the Mosul operation, said troops took Nimrud, some 30 kilometres to the south of Mosul, after heavy fighting.

It was unclear if they had liberated the nearby 13th century BC archaeological site.

The Iraqi Government has said that Nimrud was bulldozed last year as part of Islamic State's campaign to destroy symbols which the Sunni Muslim zealots consider idolatrous.

Video footage released by Islamic State, purportedly from Nimrud, also showed its fighters destroying relics with electric drills and explosives.

Nimrud lies on the eastern bank of the Tigris river, about 30 kilometres south of Mosul, where Iraqi soldiers and special forces are battling Islamic State for control of the largest city under the jihadists' control in Iraq and neighbouring Syria.

Troops converge on Mosul

Iraq's special forces meanwhile battled militants in the city of Mosul itself, where they struggled to advance against waves of suicide car bombs.

Troops are converging from several fronts on Mosul, Iraq's second-largest city and the biggest urban area under IS control, as part of an offensive launched last month.

The special forces have advanced the furthest so far, and hold a handful of districts on the city's eastern edge.

Reuters/AP