The short mobile phone footage shows a group of captives dressed in traditional western Iraqi clothes blindfolded and handcuffed in the back of a pick-up truck.
One of the militiamen is then seen cutting off a captive's ear with a knife.
"This is his right ear," the man is heard shouting at the camera.
Human rights activist Othman al-Fallahi told The New Arab: "It is completely obvious from the clothes and accents of militiamen that they from the Hashd al-Shaabi. Among the men is Kamal Hussein a well-known leader in the militia."
Fallahi added that this is just one of hundreds of videos that show militiamen torturing captured civilians in Sunni areas following fighting with the Islamic State group [IS].
The Hashd al-Shaabi (Popular Mobilisation), a force dominated by Iran-backed Shia militias, has recently played a leading role in the recapture of several cities and areas from IS.
The Shia fighters have been accused of carrying out reprisals against locals suspected of collaboration with IS in recaptured Sunni areas.
Member of parliament Mohammad al-Jaf said: "These terrible crimes against civilians along sectarian lines do not benefit the war against terror and will only pave the way for more sectarian conflict."
"The government has not spoken out against these crimes, neither have the religious clerics who have given their blessings to the militias," the lawmaker added.
It comes as Iraqi forces evacuated 635 civilians from the city of Ramadi on Sunday as they continued to clear the city two weeks after declaring victory against IS.
Federal forces retook the strategic government compound in the centre of the capital of Anbar province late last month but they have yet to assert full control over the city.