Hashid Shaabi, an Iraqi coalition of mostly Shi'ite Muslim paramilitary groups formed to fight Islamic State, discovered a network of tunnels dug by the militants near the city of Falluja in Anbar province in Western Iraq on Saturday.
One of the longest tunnels surrounded a brick factory, Hashid Shaabi fighters said.
Islamic State used the tunnels to approach, appear and escape from the front-line to reduce their casualties.
U.S.-led coalition strikes supporting Iraqi forces in the recapture of Falluja have killed 70 Islamic State militants including the group's commander in the city, a US military spokesman said on Friday.
The final battle to recapture the Islamic State stronghold near Baghdad will start in "days, not weeks", a Shi'ite militia leader said on Friday, as new reports emerged of people starving to death in the besieged Sunni city.
The first phase of the offensive that started on Monday is nearly finished, with the complete encirclement of the city that lies 50 km west of the Iraqi capital, a leader of the Iranian-backed Badr Organisation said.