The army said it was working to 'cleanse out the remaining pockets of insurgents' inside the Gezira government headquarters.
The Sudanese army and allied forces entered Wad Madani and were pushing the Rapid Support Forces (RSF) in the strategic city of Gezira, according to the army.
In a statement on Saturday, the army “thanked” the Sudanese people for “our soldiers who entered the city of Wad Madani this morning” after more than a year of RSF rule.
“They are now working to clean up pockets of terrorists that remain inside the city,” he said.
There was no immediate comment from RSF.
The office of the spokesman for the coalition government and the Minister of Information and Culture, Khalid al-Aiser, said the army had “liberated” the city.
The military posted a video showing soldiers inside the city, which has been held by the RSF since December 2023.
The Sudanese army and the RSF have been at war since April 2023, leading to the UN's worst displacement crisis and declaration of famine in parts of northeast Africa.
Wad Madani is good because it is a major road junction connecting several districts, and it is a large town close to the capital Khartoum.
Army 'in many areas of Wad Madani'
Al Jazeera's Hiba Morgan, from Khartoum, said the army has been entering the city in recent days.
“They have been occupying villages in the south and south-east of (Gezira) governorate until morning, when they seized the Hantoub Bridge – the main bridge that leads into the city,” he said.
“Soldiers are now in many areas of Wad Madani,” he said.
“Soldiers and allied terrorists have surrounded us in the streets of the city,” a witness told AFP at his home in the central Wad Madani district, asking not to be named for his safety.
The army and the RSF have been accused of war crimes including targeting civilians and bombing residential areas.

The military has been accused of summary killings, mass looting, indiscriminate brutality and siege of entire towns.
United States Tuesday he said The RSF carried out “genocide” and imposed sanctions on its leader, Mohammed Hamdan Daglo, also known as Hemedti.
The local opposition committee, which is one of the country's pro-democracy volunteer groups coordinating frontline support, hailed the advance of Wad Madani as the end of the RSF's “tyranny”.
Witnesses in military-controlled cities across Sudan said that many people had taken to the streets to enjoy the news.
Twelve million have fled their homes
The return of the entire country of Gezira could lead to a major change in the war that started as a result of the conflict between the two armed groups, which has caused the most serious problems in the world.
Since its inception, the conflict has killed tens of thousands of people and displaced more than 12 million people, more than three million of whom have fled across borders.
In the first months of the war, more than half a million people sought shelter in Gezira, before the RSF's lightning strike displaced more than 300,000 people in December 2023, according to the UN.
Many have been displaced repeatedly since then, as the feared soldiers moved south.
The RSF still controls the entire agricultural sector of Gezira, as well as almost all of Sudan's western Darfur region and southern parts of the country.
The army controls the north and east, as well as parts of the capital Khartoum.