The Kurdistan Region Security Council said the operation launched before dawn on Sunday "had achieved its key objectives".
The KRSC statement listed nine villages that had been occupied by IS since the summer of 2014 and were previously mainly inhabited by northern Iraq's Kakai and Shabak minorities.
The operation involved around 5,500 peshmerga fighters backed by US-led coalition air strikes and reconquered an area of 120 square kilometres (46 square miles).
Signup to our newsletter and follow us on Facebook and Twitter!
The area, near Khazir, lies near the main road between Mosul and the autonomous Kurdish region's capital Arbil.
The KRSC claimed that in the course of the two-day operation, 140 IS fighters were killed and 14 car bombs were destroyed.
The peshmerga officer in charge of the region said at a news conference that four Kurdish forces were killed and 34 others wounded during the operation.
The fresh push against the jihadist organisation in the north came a week after Iraqi forces launched an operation against Fallujah, IS's only other major urban hub in Iraq.