The attackers disguised in army uniforms ambushed the Popular Mobilization Forces near the northern city of Kirkuk, the group said in a statement on Monday.
Daesh militants ambushed a group of Iraq's Shia-led paramilitary fighters, killing at least 27 people, officials said on Monday, underlining the extremist group's capabilities of launching large-scale attacks, two months after Baghdad declared victory over it in the country.
The Popular Mobilization Forces, an umbrella group of mostly Shia militias also known as Hashd al Shaabi, said in a statement that the attack took place in the Al Saadounya area, southwest of the northern city of Kirkuk, when the paramilitaries were conducting overnight raids.
The attackers were disguised in army uniforms and pretended to man a fake checkpoint, the statement said, adding that ensuing confrontations lasted for at least two hours, and that some of the militants were killed, while others fled the area.
Brigadier General Yahya Rasool, a spokesman for the Iraqi military, blamed Daesh "sleeper cells" and said Iraqi forces were searching the area to find the perpetrators.
Daesh claimed responsibility for the attack.
Karim al Nouri, a PMF spokesman, described the attack as a "heinous crime" and called for thorough scrutiny of those returning to their liberated areas.
In December, Iraq declared total victory over Daesh across all of Iraq, after more than three years of fighting, dislodging the militants from all areas they gained controlled of during their 2014 blitz.
But Iraqi and US officials have warned that the group would continue with insurgent-style attacks.
Last month, Daesh launched back-to-back suicide bombings targeting labourers and street vendors in central Baghdad, killing at least 38 people.