"Today, almost 500 displaced families from Saadia are returning to the township," said Mohammed Mala Hassan, mayor of the predominately Kurdish city of Khanaqain in Diyala.
"It is the fifth phase of the returnees to the township, and we intend to return all the displaced families in separate phases," he added.
When the Islamic State (ISIS) group took over the town in August 2014, thousands of families were forced to abandon their homes.
The Kurdish Peshmerga forces recaptured Saadia several months after it was taken over, but residents were advised not to return immediately, because of abundant landmines and booby traps left behind by the fleeing militants and Shiite militants controlling the town.
Late last month, more than 155 families reportedly returned to the town of Jalawla in Diyala, after it was liberated by Kurdish Peshmerga forces.
The two towns are part of the so-called “disputed territories” that are claimed both by the central government in Baghdad and the autonomous Kurdistan Regional Government (KRG) in the north.
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