Iraq’s Prime Minister has vowed to rid the country of Islamic State in the next year, after counter-terrorism forces reclaimed the western city of Ramadi from IS fighters.

The country’s army raised the Iraqi flag above the central government complex in the western city of Ramadi a day after it declared victory over IS, who had held the city.

“If 2015 was a year of liberation, 2016 will be the year of great victories, terminating the presence of Daesh (IS) in Iraq and Mesopotamia,” Prime Minister Haider al-Abadi said in a televised address.

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“We are coming to liberate Mosul, which will be the fatal blow to Daesh.”

US Secretary of State John Kerry said the coalition would continue to support Iraqi forces as Ramadi was stabilised.

“We commend the Government of Iraq and the brave Iraqi forces that are displaying tremendous perseverance and courage in this fight,” he said.

A White House official said President Barack Obama, who is on vacation in Hawaii, had been briefed on the battle and had praised the Iraqi forces’ “courage and determination”.

“We will continue to support our partners fighting against [IS] on the ground until it is defeated,” the official said.

The Iraqi Government has said the next target after Ramadi will be the northern city of Mosul, by far the largest population centre controlled by Islamic State in either Iraq or Syria.

Washington had hoped that potentially decisive battle would take place in 2015, but it was pushed back after IS seized Ramadi.

Mosul is strategically vital for IS, which relies on the city for money by heavily taxing its residents and selling its oil supplies.

Victory in Ramadi, which was seized by Islamic State in May, was the first major triumph for Iraq’s US-trained army since it collapsed in the face of an assault by the hardline Sunni militants 18 months ago.

Ramadi, capital of the mainly Sunni Muslim Anbar province in the Euphrates River valley west of Baghdad, had been Islamic State’s biggest prize of 2015.

The US-led coalition, which was heavily involved in supporting Iraqi forces in Ramadi, has congratulated the troops on the success of an operation that began soon after they lost the city.

General Lloyd Austin, head of US Central Command which is overseeing the US role in the campaign, said the fall of Ramadi “clearly demonstrates that the enemy is losing momentum as they steadily cede territory”.

“Looking ahead, I expect our partners on the ground in both Iraq and Syria, with coalition assistance, to continue to roll back [IS] gains as we work together to defeat this enemy,” he said.

After encircling Ramadi for weeks, Iraqi forces launched an assault to retake it last week and made a final push to seize the central administration complex on Sunday.

Their progress had been slowed by explosives planted in streets and booby-trapped buildings.

Security officials have said the forces still need to clear some pockets of insurgents in the city and its outskirts.

One of the main challenges of the conflict since then has been rebuilding the Iraqi army into a force that can again capture and hold territory.