El-Bur, some 350 km northeast of the capital Mogadishu in the Galgadud region, is the latest town taken since the UN-backed AMISOM force launched a fresh offensive against the Shebab this month.
The gunmen have largely fled ahead of the assaults, only to later stage guerrilla attacks.
"El-Bur town has fallen, and the soldiers supported by the AU have secured control peacefully," Somali army Colonel Mohamed Adan said by telephone, adding that the "terrorists fled the town prior to the arrival of the national army."
Residents confirmed the town's capture, saying that Ethiopian troops with the AU force were setting about reinforcing strategic sites.
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"Ethiopian soldiers armed with tanks and other armoured trucks entered the town, and have taken positions around key areas," said El-Bur resident Mohamed Hashi.
The town was reported to be calm.
"There was no fighting at all, as the last Al-Shebab fighters left town in the early morning," said resident Ahmed Agole. "But most of the businesses are closed even though the situation in town is quiet."
"A roadside bomb exploded hitting an AMISOM military convoy... We've seen the dead bodies of two civilians," said Abdi Garad, a member of a local militia working with the AU forces.
Witnesses reported that AU soldiers had been killed or wounded, although the force said that only one civilian had died.
"The explosion was very heavy, and two of the military trucks were damaged," said witness Abdikarim Yahye.
"I saw four soldiers being taken out of one of the damaged trucks. I could not go close to the area, but they looked dead," shopkeeper Mohamed Nure said.