The town lies on the west bank of the Tigris river 260 kilometres northwest of Baghdad and around 80 kilometres south of Mosul, the jihadists' last major bastion in Iraq.
Iraqi forces have already reconquered other towns north of Sherqat on the way to Mosul but the question of Shiite militia involvement in military operations there had held up the push.
"The operation to liberate Sherqat started at 5:30 am from several directions... With the support of coalition forces," Joint Operations Command spokesman Yahya Rasool said.
Sherqat lies in the far north of Salaheddin province, which includes the cities of Samarra and Tikrit, and close to the border with Nineveh province of which Mosul is the capital.
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Ahmed al-Assadi, the spokesman of the Hashed al-Shaabi (Popular Mobilisation) paramilitary force, also announced the operation.
"The sons of Hashed al-Shaabi and the Iraqi army backed by the air force launched the 'Sherqat Dawn' operation to finish expelling those terrorist gangsters from usurped Iraqi land," he said.
The Hashed al-Shaabi, which has played a big part in retaking IS-held areas since 2014, is nominally under the control of the prime minister but dominated by Tehran-backed Shiite militia.
Rasool stressed that only tribal forces -- sometimes referred to as Hashed al-Ashaeri (Tribal Mobilisation) -- were fighting in Sherqat, not Shiite militias.
Prime Minister Haider al-Abadi, speaking from New York after a meeting with US President Barack Obama, said the same operation also included efforts to flush out IS fighters from desert areas near Ramadi and Heet in the western province of Anbar.
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