The assault on the northern city was the biggest operation mounted by the Iraqi military since U.S. forces withdrew in 2011, and the United States predicted Islamic State would suffer "a lasting defeat."
As the assault got underway, a Reuters correspondent saw helicopters overhead releasing flares and heard explosions on the city's eastern front, where Kurdish fighters moved forward to take outlying villages.
Some 30,000 troops from the Iraqi army, Kurdish Peshmerga militia and Sunni tribal fighters were expected to take part in the offensive to drive an estimated 4,000 to 8,000 Islamic State militants from Mosul.
"I announce today the start of the heroic operations to free you from the terror and the oppression of Daesh," Prime Minister Haider Abadi said in a speech on state TV, using an Arabic acronym for Islamic State.
"We will meet soon on the ground of Mosul to celebrate liberation and your salvation," he said, surrounded by the armed forces' top commanders.
Qatar-based al-Jazeera television aired video of what it said was a bombardment of Mosul that started after Abadi's speech, showing rockets and bursts of tracer bullets across the night sky and loud sounds of gunfire.
The assault on Mosul, a city of 1.5 million people, is the biggest undertaken by the Iraqi military since 2011 and could be one of the biggest military operations in Iraq since the 2003 U.S.-led invasion that toppled Saddam Hussein.
"This operation to regain control of Iraq's second-largest city will likely continue for weeks, possibly longer," said the commander of the coalition, U.S. Lt. Gen. Stephen Townsend, in a statement.
Mosul is the largest city that Islamic State controls and its last major stronghold in Iraq.
"This is a decisive moment in the campaign to deliver ISIL a lasting defeat," U.S. Defense Secretary Ash Carter said in a statement, using an acronym for Islamic State.
"We are confident our Iraqi partners will prevail against our common enemy and free Mosul and the rest of Iraq from ISIL's hatred and brutality."
In 2014, Islamic State leader Abu Bakr al-Baghdadi proclaimed from Mosul's Grand Mosque a "caliphate" in Iraq and neighboring Syria, meaning an Islamic state with himself its absolute ruler.
Islamic State has been retreating since the end of last year in Iraq, where it is confronting U.S-backed government and Kurdish forces as well as Iranian-backed Iraqi Shi'ite militias.
The Iraqi Kurdish military command said 4,000 Peshmerga were taking part in an operation to clear several villages held by Islamic State on the eastern front, in an attack coordinated with a push by Iraqi army units from the southern front.
`"We are the real Muslims, Daesh are not Muslims, no religion does what they did," said a young Kurdish fighter in battle dress as he scanned the plain east if Mosul from his position on the heights of Mount Zerlik.
As he spoke a Humvee drove by with the word Rojava, or Syria's Kurdistan, painted on the protection plate of the machine gun turret.
"This is all Kurdistan,'' said Major Shiban Saleh, one of the fighters onboard. "When we’re done here, we will chase them to Raqqa or wherever they go," he added referring to the largest city under control of the militants in Syria.
He said about 450 Syrian Peshermga fighters were involved in the offensive east of Mosul, which aims to take back nine villages during the day.
Speaking in the early hours of Monday, Abadi sought to allay fears that the operation would turn into sectarian bloodletting, saying that only the Iraqi army and police would be allowed to enter the mainly Sunni city.
Local Sunni politicians and regional Sunni-majority states including Turkey and Saudi Arabia cautioned that letting Shi'ite militias take part in assault could spark sectarian violence.
"The forces that lead the liberation operation are the brave Iraqi army with the police forces," Abadi said. "They will enter the city and no one else," he added, asking the population to cooperate with the government's forces.
The Iraqi army dropped tens of thousands of leaflets over Mosul before dawn on Sunday, warning residents that the offensive was imminent. The leaflets carried several messages, one of them assuring the population that advancing army units and air strikes "will not target civilians" and another telling them to avoid known locations of Islamic State militants.
Reflecting authorities' concerns over a mass exodus that would complicate the offensive and worsen the humanitarian situation in the area, the leaflets told residents "to stay at home and not to believe rumors spread by Daesh" that could cause panic.
Russian President Vladimir Putin said on Sunday he hoped the United States and its allies would do their best to avoid civilian casualties in an attack on Mosul.
The United Nations last week said it was bracing for the world's biggest and most complex humanitarian effort in the battle for the city, which could make up to 1 million people homeless and see civilians used as human shields or even gassed.
There are already more than 3 million people displaced in Iraq as a result of conflicts involving Islamic State. Medicine is in short supply in Mosul, and food prices have risen sharply.
U.N. Under Secretary General for Humanitarian Affairs Stephen O'Brien in a statement called for protection of Mosul's civilians, urging all parties to "ensure they have access to the assistance they are entitled to and deserve."