"Iraqi forces early this morning breach into old Mosul, the final ISIS-held district in the city," Brett McGurk, the U.S. envoy to the international coalition fighting Islamic State, said on Twitter.
"This will be a terrifying time for around 100,000 people still trapped in Mosul's Old City ... now at risk of getting caught up in the fierce street fighting to come," the International Rescue Committee (IRC) said in a statement.
"We are trying to be very careful, using only light and medium weapons ... to avoid casualties among civilians," CTS divisional commander Major General Maan Saadi told Iraqi state TV.
Islamic State snipers are shooting at families trying to flee on foot or by boat across the Tigris River, as part of a tactic to keep civilians as human shields, the United Nations said on Friday.
The fall of Mosul would, in effect, mark the end of the Iraqi half of the "caliphate" that Islamic State leader Abu Bakr al-Baghdadi declared in a speech from a mosque in the Old City three years ago and which once covered large areas of Iraq and Syria.