"There are still pockets (of resistance) that will be cleared in the upcoming hours," Iraqi Prime Minister Haider al-Abadi said in a televised address.
The governor of Anbar province, where Falluja is located, tweeted that the city "is liberated."
"Daesh is rapidly collapsing," Anbar Gov. Sohaib Al-Rawi said on Twitter, using another name for ISIS. "We must now focus our efforts on a major humanitarian catastrophe still unfolding."
The announcement came nearly four weeks after the start of a U.S.-backed offensive to liberate ISIS' last major foothold in Anbar province.
During a televised address, the Prime Minister said Iraqi forces are now in control of Falluja's city center, something Iraq hasn't been able to claim in more than two years.
But U.S. Secretary of Defense Ash Carter was more cautious when asked Friday about Falluja.
"They are in control of a portion of the city. I think it's too early to say all of the city," Carter said.
Iraqi forces, with the help of Shiite militias and U.S. air power, have been pounding targets since May 23.
Falluja, 40 miles west of Baghdad, has been in the clutches of ISIS since early 2014, part of the group's campaign of terror across Iraq and Syria. The Sunni terror group captured territory in parts of both countries for what it calls its caliphate.
The brutal assault to flush out the militants forced thousands of civilians to flee, with ISIS trapping tens of thousands more
within the city limits.
Earlier this month, the U.N. refugee agency warned that an estimated 50,000 people are in grave danger
, caught in the city-turned-combat zone as the Iraqi military's bombardment intensified.
In the weeks that followed, reports trickled out of ISIS militants using civilians as human shields, with others buried under rubble as bombs rained down.
With food shortages and supply lines cut, according to the United Nations, others simply starved.
"Food is scarce in the city," said Um Ahmed, a 40-year-old living in Falluja with her family. "We have mostly been relying on dates for our meals."
Others who refused to fight faced a certain death.
"There are reports of a dramatic increase in the number of executions of men and older boys in Falluja (who are) refusing to fight on behalf of extremist forces," said Leila Jane Nassif, the U.N. agency's assistant representative in Iraq.
Many of those now in displacement camps outside Baghdad say they barely made it out
of the villages and towns surrounding the besieged city.
At the end of his address Friday, Abadi delivered a message directly to ISIS saying, "There is no place for you in Iraq. You will pay for all your crimes."
Liberation of Falluja would allow military resources to hone in on Iraq's second-largest city, Mosul, which remains under ISIS control.
"Falluja has returned to the nation and Mosul is the next battle," a message on Abadi's Twitter account said Friday.