The Mosul palace was attacked in a joint coalition operation on Monday after "extensive surveillance" established that the Islamic State was using it as a headquarters and training centre for foreign terrorist recruits, a report on RT online said.
The main palace is believed to have served as accommodation and a meeting venue for the terrorist group, while outbuildings were used for command and control, training, internal security and repression.
"Daesh [Arabic pejorative term for IS] has been losing followers and territory for months, and emphatic strikes like this show that we and the coalition will not waver," Britain's Defence Secretary Michael Fallon said.
"Daesh fighters, both foreign and home-grown, can see that they are targets inside this cult."
IS has held control of Mosul, Iraq's second-largest city, since June 2014. The British Parliament approved airstrikes in Iraq against IS in September of that year.
Saddam built the palace, which includes three lakes and several manmade waterfalls, in 1994 after securing agreements from the UN weapons inspectors to restrict visits to his personal residences.
The former Iraqi president, who was executed in 2006, is estimated to have spent at least $2 billion on 50 palaces across Iraq between 1991 and 1999.
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