Prime Minister Haider al-Abadi announced the operation, which comes a month after the country's troops freed Mosul from the grip of the militant group. Abadi said that Iraq's Hashed Al-Shaabi paramilitary forces would help army, police and counter-terrorism units to retake Tal Afar.
Iraqi forces have pushed into the outskirts of one of the last Islamic State-held areas in the country - the northwestern city of Tal Afar.
The Norwegian Refugee Council said on Saturday that refugees near the northern city of Tal Afar were faced with harsh conditions, and were stopped by authorities in east of Mosul and Kurdish areas as they tried to flee the fighting.
"Though the recent liberation of Mosul, Iraq's second-largest city, was a decisive victory for the Iraqi security forces, it did not mark the end of ISIS in Iraq, or its worldwide threat", Townsend said.
The battle for Tal Afar will be closely watched by regional powers, given its strategic location near the border with both Syria and Turkey.
The air force warned local people that a conflict was imminent by dropping hundreds of leaflets over the city, which fell under Isis control in 2014. Tal Afar had a population of about 200,000 before Isis captured it and had witnessed sectarian clashes even before the arrival of the Isis.
He said the army and security commanders had devised a plan to dislodge Daesh from Tal Afar, which required the participation of security personnel as well as Hashd al-Sha'abi and tribal fighters.
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Residents who left Tal Afar last week said the militants looked exhausted.
"Their faces looked desperate and broken".
The Shi'ite Popular Mobilisation Forces (PMF), some of whom are trained and armed by Iran, confirmed they are also taking part in the battle.
The U.S. -led coalition providing air and other support to the troops praised what it said was a "capable, formidable, and increasingly professional force".
"In preparation for the operation for the liberation of Tal Afar, the U.S. is creating a military base near the city".
The United Nation's International Organization for Migration (IOM), estimates that about 10,000 to 40,000 people are left in Tal Afar and surrounding villages.