"The town of Tal Afar and the airport...Are completely under the control of the militants," the official said on condition of anonymity.
Witnesses said security forces had departed the town, and confirmed that militants were in control.
The town, which is located along a strategic corridor to Syria, had previously been the largest in the northern province of Nineveh not to fall to militants.
A major militant offensive, spearheaded by jihadists from the Islamic State in Iraq and the Levant (ISIL) but involving a raft of other Sunni groups as well, began in Nineveh's capital Mosul on June 9.