Rami Abdel Rahman, director of the Syrian Observatory for Human Rights, told AFP that fighters from the Kurdish People's Protection Units (YPG) had "expelled all Islamic State fighters from Kobane and have full control of the town."
"The Kurds are pursuing some jihadists on the eastern outskirts of Kobane, but there is no more fighting inside now."
Signup to our newsletter and follow us on Facebook and Twitter!
The loss of Kobane, also known as Ain al-Arab, would be a key symbolic blow against IS, which has lost more than 1,000 fighters trying to capture the town since September 16.
At one time it looked set to overrun the town, which lies on the Syrian-Turkish border, with its superior firepower and waves of foreign fighters.
But Kurdish fighters backed by US-led air strikes have gradually pushed back the jihadists, with analysts saying the loss could put the brakes on their plans for expansion in Syria.