After encircling the city for weeks, the Iraqi military made a final push to seize the central administration complex on Sunday.
Iraq's counter-terrorism forces raised the Iraqi flag above the complex on Monday, according to a military spokesman.
"Yes, the city of Ramadi has been liberated," joint operations spokesman Brigadier General Yahya Rasool said in a statement broadcast on state television.
A US defence official said it was so far unable to confirm the Iraqis' claims.
The capture of Ramadi, capital of mainly Sunni-Muslim Anbar province in the Euphrates River valley west of the capital, would deprive IS militants of their biggest prize of 2015.
The Iraqi army had already retaken the city of Tikrit from the jihadists in the spring. The final stronghold for IS in Iraq is Mosul in the north, which the government is likely to target next.
State television broadcast footage of troops, Humvee vehicles and tanks advancing through Ramadi streets amid piles of rubble and collapsed houses. Some districts appeared to have been completely destroyed by the advance.
Officials did not give any immediate figures for the number of people killed in the battle. The government says most civilians were able to evacuate before it launched its assault.
Anbar provincial council member Falih al-Essawi called on the government to restore services to Ramadi quickly and start rebuilding the city to allow the return of the displaced.
"It will not be easy to convince families to return to a city that lacks basic human needs," he told Reuters.
Islamic State, also known by the acronyms ISIS, ISIL and Daesh, swept through a third of Iraq in June 2014 and declared a "caliphate" to rule over all Muslims from territory in both Iraq and Syria, carrying out mass killings and imposing a draconian form of Islam.
Its rise was aided by the swift collapse of the Iraqi army, which abandoned city after city, leaving fleets of armoured vehicles and other American weapons in the fighters' hands.
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