Basim Razzo, who lost his wife, daughter, brother and nephew in the attack by Dutch F-16s in Mosul in September 2015, will receive nearly one million euros, Dutch broadcaster NOS said.

Defence Minister Ank Bijleveld-Schouten said in a letter sent to parliament late on Tuesday that she had decided "to proceed with a voluntary offer of compensation for humanitarian reasons".

The ministry wanted to compensate Razzo for the "enormous human suffering that was inflicted on him and the material damage he suffered", she said.

The payment did not mean that the Netherlands accepted responsibility for the incident, said Bijleveld-Schouten, adding that there had not been any "illegal use of force".

The letter did not reveal the amount of compensation, partly at Razzo's demand, she added.

The Dutch military said it had bombed a house were IS extremists were believed to be located but later said that the information had been incorrect and that it was a civilian dwelling.

Dozens of Iraqi civilians are seeking compensation in a separate case against the Netherlands over an air strike in Hawija in 2015 in which 70 people were killed.