Abadi made the comments on Tuesday during his weekly press conference in Baghdad.
"As I have promised to you all, this year will see the end of IS in Iraq," Abadi said, just over a week after he announced the recapture of the extremists' stronghold of Hawija.
"Members of IS are currently gripped with fear everywhere," he added.
The premier also stressed the importance of maintaining the unity of the country, referring to the Kurdistan's recent independence referendum, which he has strongly opposed.
Last week, Iraqi forces retook one of the Islamic State group's last two enclaves in the country, overrunning the longtime insurgent bastion of Hawija after a two-week offensive.
IS once held one-third of Iraqi territory but it has suffered loss after loss this year and now only controls a slither of land in the Euphrates Valley near the Syrian border.
The "final large fight" against IS in Iraq will take place on the border with Syria, a general in the US-led coalition against the extremists said on Saturday.
IS seized vast areas of Iraq and Syria in 2014, but multiple offensives in both countries have since cornered it in a pocket of territory stretching from Syria's Deir az-Zour to the Iraqi towns of Rawa and al-Qaim.