Khaled al-Obeidi said he had intelligence of increasing conflict, especially over financial issues, among ultra-hardline militants of the group known as Daesh in Arabic by its enemies.
"Many Daesh families and leaders in Mosul have sold their property and sneaked out towards Syria, and a segment even tried to sneak out towards (Iraq's Kurdish) region", he said in an interview on state television.
Islamic State has lost at least half the territory it seized in Iraq in 2014. The group has also lost territory in Syria, where it emerged amid a civil war which is now in its sixth year, but US-backed rebel forces there have had less success in beating it back.
Fighters in Mosul, the group's de facto capital in Iraq and the largest city under its control anywhere across its self-proclaimed caliphate, are thought to number in the thousands but probably under 10,000.
Iraq is expected to mobilize up to 30,000 forces to retake the city in coordination with US-led coalition air support.
