The "peshmerga-led ground offensive, backed by international coalition warplanes" started before dawn, the Kurdistan Region Security Council (KRSC) said.
It said the operation involved around 5,500 peshmerga and was aimed at retaking several villages from the IS near Khazir, east of Mosul.
"This is one of the many shaping operations expected to increase pressure on ISIL (IS) in and around Mosul in preparation for an eventual assault on the city," the KRSC said.
Six hours into the operation, peshmerga forces had retaken the village of Mufti, the statement said.