Facing little resistance, revolutionary fighters captured the airport and other locations in a southern desert city that is considered one of the last remaining strongholds of Moammar Gadhafi's forces, fighters said.
The capture of Sabha would be a major victory for Libya's new rulers, who have struggled to rout forces loyal to Moammar Gadhafi a month after sweeping into Tripoli and forcing the ousted leader into hiding.
A push to capture Gadhafi's hometown of Sirte and the mountain enclave of Bani Walid have stalled as well-armed forces loyal to the fugitive leader have fought back fiercely with rockets and other heavy weaponry.
"Our flags are waving there over the airport and other parts of Sabha," Col. Ahmed Bani, the military spokesman for the transitional government, told reporters in Tripoli.
The airport is about four miles from the center of Sabha, 400 miles (650 kilometers) south of Tripoli.
Salam Kara, the Benghazi-based spokesman for Sabha's local council, said revolutionary forces also had seized an old fort as well as a convention center and a hospital inside the city.
"It is a great achievement by the rebels from all over the south and led by the rebels from inside of Sabha," he said, predicting more good news later Monday. "The resistance is not strong because Sabha's rebels have been holding protests for a long time and just needed help from outside."
Meanwhile, France denied on Monday that it had mercenaries in Libya, after Gadhafi's loyalists said they had captured 17 foreigners -- some British and French -- in the fight for a town still held by the ousted leader's followers.
The claim by Gaddafi's spokesman Moussa Ibrahim that foreign security personnel had been captured in the battle for the pro-Gaddafi bastion Bani Walid could not be verified and no immediate proof was presented.