The monitoring group and US military officials have said ISIS militants are fleeing Mosul and heading for Raqqa, Syria, the de facto capital of ISIS, as Iraqi-led forces push to free the key Iraqi city from the terror group.
Dozens of ISIS families have already arrived in Raqqa, the observatory said.
Ethnic cleansing by ISIS has displaced, killed and enslaved hundreds of thousands of Iraqi Yazidis, members of an ancient ethnic and religious minority. Modern-day Iraq is the traditional homeland of the Yazidis.
Islamic militants captured thousands of Yazidi women and children, and killed the men. ISIS claims the Quran justifies taking non-Muslim women and girls captive and permits them to be raped -- an assertion denied by Islamic scholars.
The Yazidis believe in a single god who created the Earth and left it in the care of a fallen angel, and they have been subjected to large-scale persecution by ISIS.
The United Nations has accused ISIS of committing genocide against the Yazidis.
In June, a UN report estimated that ISIS holds about 3,500 slaves and that the terror group continues to subject women and children to sexual violence, particularly in the form of sexual slavery. The report said ISIS' actions "may, in some instances, amount to war crimes, crimes against humanity, and possibly genocide."
In Iraq, ISIS secured large sums from ransom payments and the sale of slaves, especially young Yazidi women. In 2014, ISIS made about $20 million from ransom payments, the US Treasury estimates.
Yazidis are of Kurdish descent, and their religion is considered a pre-Islamic sect that draws from Christianity, Judaism and Zoroastrianism.
They have long suffered persecution, with many Muslims referring to them as devil worshippers.
Most of the 500,000 Yazidis live in and around Sinjar in northwestern Nineveh province, bordering Iraq's Kurdish region.