Iraqi forces retook the strategic northern town of Baiji, near the country's largest oil refinery, on Friday after more than two weeks of fighting with the Islamic State group, officials said.

Baiji, which had been out of government control for months, lies on the main highway to Iraq's IS-controlled second city Mosul, and its recapture further isolates militants in the city of Tikrit, to the south.

It is the largest town to be recaptured by government forces since IS-led militants overran much of the country's Sunni Arab heartland in June, and the victory is one of the most significant in the conflict so far.

"Iraqi forces were able to regain complete control of the town of Baiji," Ahmed al-Krayim, the head of the Salaheddin provincial council, told AFP.

An army major general, a police colonel and an army major all confirmed to AFP that Baiji was retaken.

State television also reported that the town was back in government hands.

Soldiers, police, Shiite militiamen and tribesmen were all involved in the operation to retake Baiji, and are now pushing farther north, Krayim said.

"Iraqi forces are on their way to the Baiji refinery," north of the town, where security forces have held out against repeated jihadist attacks, he said.

Breaking through to the massive refinery would be another significant win for the government in Baghdad.

The Baiji refinery once produced some 300,000 barrels of refined petroleum products per day, meeting 50 percent of the country's needs, but it would take time before it could be brought back online.

The operation to retake Baiji began more than four weeks ago when security forces and pro-government fighters began advancing towards the town from the south, slowed by bombs militants had planted on the way, and finally entered the town on October 31.

But the victory was marred by a suicide bombing Friday that targeted a military command headquarters set up at Tikrit University, south of Baiji, killing at least four people, army officers said.

Three suicide bombers and other militants had attacked the same headquarters in late October, disrupting the initial push into Baiji.

IS also claimed a truck bombing in Baiji that killed a senior police officer last week.

Iraqi troops initially struggled to regain ground from IS after the start of the jihadist offensive.

But helped by US-led air strikes, support from Shiite militias and Sunni tribesmen, assistance from international advisers, and a signficant reshuffling of top officers, Baghdad's forces have begun to make progress.