The displaced people, carrying their most essential belongings and makeshift white flags, were met by Peshmerga forces, who served them food and water at a home near the village of Bashiqa.
One man, Abu Anhar, said he took off his white shirt to indicate that he was a civilian, as he walked towards the Peshmerga forces.
Women and children were transported by trucks to nearby refugee camps.
"There was nothing available, no electricity, no water, our life was very difficult. We left three days ago, not sure if they (Islamic State militants) are still there," said Anhar.
Peshmerga fighter, Barzan Sadiq, said some of the forces risked their lives to help the families reach safety.
According to the army, about 90 Islamic State-held villages and towns around Mosul have been retaken so far in the campaign that aims to crush the Iraqi half of Islamic State's declared caliphate in Iraq and Syria.
It may become the biggest battle yet in the 13 years of turmoil triggered by the US-led invasion of Iraq in 2003, and could require a massive humanitarian relief operation.
Some 1.5 million residents remain in the city and worst-case forecasts see up to a million being uprooted, according to the United Nations.
UN aid agencies said the fighting has so far forced about 7,400 to flee their homes.
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