Troops have cleared the old citadel and its surrounding neighbourhood of militants, Lt Gen Abdul Amir Yarallah said on Saturday.
Clashes were still being reported in the northern outskirts of the city.
Tal Afar, near the Syrian border, is one of the jihadists' last remaining strongholds in Iraq.
Last month, a long-running operation drove IS militants from the Iraqi city of Mosul.
Gen Yarallah, who is in charge the latest offensive, said his forces were now dealing with the final pockets of jihadi resistance in Tal Afar.
Footage from within the city shows Iraqi forces moving through the streets in tanks with black smoke billowing from targeted buildings.
"Tal Afar city is about to fall completely into the hands of our forces, only 5% remains [under IS control]", a military spokesman told Reuters news agency.
Soldiers from the Shia-led paramilitary Popular Mobilisation (Hashd al-Shaabi) said they had encountered resistance from IS in the form of snipers, booby-trapped cars and mortars.
Iraqi forces broke through IS defences to reach the centre of Tal Afar on Friday.
Elite units had also seized the northern neighbourhoods of Nida, Taliaa, Uruba, Nasr and Saad, the Iraqi Joint Operations Command (JOC) said.
It was believed about 2,000 militants had been inside Tal Afar, along with between 10,000 and 40,000 civilians.
Tal Afar, which had a predominantly ethnic Turkmen population of 200,000 before it fell to IS in June 2014, sits on a major supply route between Mosul, about 55km (35 miles) to the east, and the Syrian border, 150km (90 miles) to the west.
Security sources say a disproportionate number of men from the city filled the ranks of IS as commanders, judges and members of their religious police.
The city was cut off during the nine-month Mosul offensive by troops and allied militiamen from the Hashd al-Shaabi. But they did not attempt to retake it until this week.
More than 30,000 civilians have fled the Tal Afar area since the end of April, many of them arriving at Iraqi government mustering points exhausted and dehydrated after trekking for 10 to 20 hours in extreme heat, the UN said.

This article was about:
Iraqi forces say they are poised to recapture the city of Tal Afar from so-called Islamic State (IS) after six days of intense fighting.