Fighters brandishing rifles danced in the Anbar provincial capital as top commanders paraded through the streets after recapturing the city they lost to IS in May.
Pockets of jihadists may remain but the army said it no longer faced any resistance and that its main task was to defuse the countless bombs and traps IS left behind.
"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 announced on state television.
"Daesh has planted more than 300 explosive devices on the roads and in the buildings of the government complex," said Brigadier General Majid al-Fatlawi of the army's 8th division.
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Several local officials said IS used civilians as human shields to escape the battle when it became clear their last stand in Ramadi was doomed.
A senior army commander told AFP that his forces were still sweeping the outskirts of the city for potential pockets of jihadists.
The Iraqi authorities did not divulge any casualty figures for the federal forces but medics told AFP that close to 100 wounded government fighters were brought to Baghdad hospitals on Sunday alone.
"The dead bodies are taken directly to the main military hospital" near the airport, said one hospital source, explaining why he could not provide a death toll.
The US-led anti-IS coalition praised the performance of the Iraqi forces in retaking Ramadi, an operation in which it played a significant role, training local forces, arming them and carrying out what it said were 600 air strikes since July.
"This great victory has broken the back of Daesh and represents a launchpad for the liberation of Nineveh," Salim al-Juburi said in a statement.
Nineveh is home to Iraq's second city of Mosul, from which IS supremo Abu Bakr al-Baghdadi proclaimed his "caliphate" straddling Iraq and Syria more than a year and a half ago.