The government lost control of Fallujah in 2014, months before ISIL, also known as ISIS, took Iraq's second largest city, Mosul, and swept across large parts of the country.
"We promised you the liberation of Fallujah and we retook it. Our security forces control the city except for small pockets that need to be cleared within the coming hours," Abadi said on Friday in a brief address on state TV.
"Fallujah has returned to the nation and Mosul is the next battle," Abadi also said on Twitter. "Daesh will be defeated," he added, using an Arabic acronym for ISIL.
Earlier on Friday, Iraqi forces said they had entered the centre of
Fallujah.
"The counterterrorism service and the rapid response forces have retaken the government compound in the centre of Fallujah," the operation's overall commander, Lieutenant-General Abdulwahab al-Saadi, told the AFP news agency.
The Iraqi flag is now raised on top of the building, symbolising government control.
Commanders said their forces had met limited resistance from terrorists during the push into the city centre.
"This is a very significant development," said Al Jazeera's Omar Al Saleh, who has reported extensively on the conflict in Iraq.
"It is a big moral boost for Iraqi soldiers."
Matthew Henman, from the Jane's Terrorism and Insurgency Centre, said that even with the "breakthrough", it would take "much longer" to completely get rid of Daesh in Fallujah, and prevent future attacks.
He also said that if the fight over Fallujah wraps us quickly, then
more troops would be realigned to help the government push against ISIL
in Mosul.
Government troops and the Popular Mobilisation
Forces are leading the campaign to retake the city from terrorists.