Iraqi forces backed by the US-led coalition have liberated the last town in the country held by the Islamic State group, according to defence officials.

US-backed Iraqi forces have launched a multi-pronged assault to retake the town of Tal Afar, west of Mosul, marking the next phase in the country's war against Islamic State.

US and Iraqi troops swept into the insurgent stronghold of Tal Afar early today, conducting house-to-house searches and battering down walls with armoured vehicles in a second bid to clean the city of militant fighters.