Iraq declared the city of Ramadi liberated from Daesh and raised the national flag over its government complex after clinching a landmark victory against the militants.

Fighters brandishing rifles danced in the Anbar provincial capital as top commanders paraded through the streets after recapturing the city lost to Daesh in May.

Pockets of militants may remain, but the army said it no longer faced any resistance in the city and that its main task was to defuse countless bombs and traps.

"Ramadi has been liberated and the armed forces of the counter-terrorism service have raised the Iraqi flag above the government complex," Brigadier General Yahya Rasool said on television.

The militants' loss of Ramadi came on the heels of the recapture in neighbouring Syria of a key dam on the Euphrates by an alliance of Kurdish and Arabs.

Iraqi Prime Minister Haider Al Abadi congratulated the fighters who retook Ramadi, vowing to liberate the second city of Mosul and rid the entire country of Daesh in 2016.

"We are coming to liberate Mosul, which will be the fatal blow to Daesh," he said in a televised address.The US-led coalition against Daesh, which has backed the fight against the militants by training and arming local forces and with hundreds of air strikes, hailed the Iraqi forces for taking the city.

"We commend the government of Iraq and the brave Iraqi forces that are displaying tremendous perseverance and courage in this fight," US Secretary of State John Kerry said.