Masaken Hanano was the first district the rebels took in the summer of 2012 in a move that divided Aleppo into an eastern area held by the insurgents and a western district controlled by government forces.
Since then, more than 250,000 civilians have been trapped under government siege for months in the rebel-held east, with dwindling food and fuel supplies.
The capture of Masaken Hanano in northeastern Aleppo is part of a major government offensive now in its 12th day that could isolate that part of the city from rebel-held areas in the south.
Regime forces had been advancing inside Masaken Hanano for several days, and yesterday state television said they were progressing "from three axes".
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Today, the state broadcaster and the official SANA news agency said President Bashar al-Assad's armed forces, backed by their allies, had taken "full control" of the district.
"The armed forces retook full control of Masaken Hanano after having put an end to the presence of terrorists there," the state broadcaster said, referring to the rebels.
But Yasser al-Youssef, from the rebel group Nureddin al-Zinki, said fighting was still under way on the southern edges of Masaken Hanano, which he called a district of "strategic importance".
Youssef warned that if regime forces can advance to the adjacent neighbourhood of Sakhur, then eastern Aleppo will be split in two.
Observatory head Rami Abdel Rahman said that 80 per cent of Masaken Hanano was under the control of government forces who have the rest in their line of fire.
The latest regime push comes after days of intense bombardment on the rebel-held east, which was pounded with air strikes, shells and barrel bombs.