Special forces, soldiers, police, border guards and pro-government paramilitaries are involved in the operation to retake the Anbar province town, Iraq's Joint Operations Command said in a statement.
Tanks and artillery are taking part in the operation, which is also backed by air support from Iraqi forces and the US-led coalition against IS, it said.
Rutba, located in western Anbar province along the main road to Jordan, has been held by the jihadist group since 2014.
Iraqi forces have since regained significant ground from the jihadists, securing the Ramadi area earlier this year and retaking the town of Heet last month.
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But parts of Anbar -- including its second city Fallujah -- are still under IS control, as is most of Nineveh province, to its north.
And the jihadists are still able to carry out bombings in government-held areas -- something they did more frequently prior to the June 2014 offensive.