In the imposing building riddled with gaping holes and a blackened ceiling, workers removed sacks containing packs of banknotes rolled up in black plastic bags from a hole in the floor.

"After starting to fix the building and removing rubble, we were able to access the safes," said Hussein al-Zaidi, chief of the Mosul branch of the Iraqi central bank.

"We discovered banknotes in bags, small bills," he added.

The banknotes were badly damaged after "the coffers were engulfed in groundwater due to an air strike" during the offensive to take Mosul from the jihadists.

Some 175 bags have been found so far, he said, without specifying the total value of the money.

When IS militants took Mosul in the summer of 2014, they seized several hundred million dollars as well as gold bars from the Mosul branch of Iraq's central bank.

The country's second city, Mosul was the jihadists' Iraqi "capital" of their self-proclaimed "caliphate".

The Iraqi army and a US-led coalition retook the city in 2017 after intense bombardment and fighting that left it in ruins.

Iraq declared victory over the extremists later that year.

Earlier this month, Iraq said it had captured IS's suspected finance chief, Sami Jasim al-Jaburi, in an operation in Turkey.