Fighting raged in a village between the complex and the nearby town of Baiji, near a deserted area believed to contain roadside bombs planted by the militants that has been preventing an advance, they said.
“We are about one kilometer from the refinery. Daesh (Islamic State) militants are escaping to the direction of a river. Airplanes are targeting them,” said an army captain.
A witness said security forces crossed a bridge close to the refinery, 200 km north of the capital.
Islamic State fighters seized the city of Baiji and surrounded the sprawling refinery in June during a lightning campaign through northern Iraq.
The group also controls territory in neighboring Syria and has proclaimed a caliphate straddling both countries.