Mr Fallon said almost 200 additional personnel and an engineering squadron will travel to the country, bringing the total number of British personnel in Iraq to 1,100.
Fifty experts will be sent to the Al Asad Airbase in western Iraq to provide training on improvised explosive devices, infantry skills and combat first aid, while 90 will assist with guarding the airbase.
Thirty staff will establish a headquarters and an engineering squadron will be deployed for around six months to build infrastructure for the project.
Heavy machine gun and sniper rifle ammunition worth £1.4 million will also be handed to Iraq for use with the weapons previously gifted by the UK for the fight against IS.
Mr Fallon said in a written statement: “As Iraqi forces continue to regain territory and begin preparatory operations to retake Mosul, it is important that the coalition continues to provide the support needed to allow them to make further progress.”
The RAF has so far conducted around 900 air strikes against IS targets in Iraq and Syria. British forces have also helped to train more than 18,000 members of the Iraqi security forces.