Yemeni troops took control of the city of Shuqra on Friday after Al-Qaeda militants pulled out, the third jihadist bastion in the south to fall in the space of a week, a military official said.
"The army has taken control of Shuqra," said a military official, adding that "troops have taken positions in the centre" of the coastal city while militants were seen fleeing.
A local official told AFP that Al-Qaeda fighters "pulled out towards Azzan," in Shabwa province, some 110 kilometres (70 miles) to the northeast.
The official said that militants fled after the army "tightened the noose from three fronts."
Shuqra was the last major stronghold of Al-Qaeda in Abyan province to fall to government forces, which launched an all-out offensive last month that had already resulted in the recapture of the towns of Jaar and Zinjibar.
The militants remain in control of the smaller Abyan town of Al-Mahfad.
At least 48 people, including 40 militants, were killed on Thursday in the battle for Shuqra, state media said.
The official Saba news agency said the air force had launched around 100 raids against militants holed up in the city.
On Tuesday, the military drove the jihadists out of the provincial capital of Zinjibar and Jaar, with Al-Qaeda gunmen believed to have fled east to Shuqra.
Taking advantage of the weakening of central government control by an Arab Spring-inspired uprising last year, the militants had overrun most of Abyan, taking full control of Zinjibar, Jaar, Shuqra and several villages.
On May 12, the army launched an all-out offensive to recapture territory lost to the jihadists.
A total of 540 people have died in the campaign -- 402 Al-Qaeda militants, 78 soldiers, 26 militiamen and 34 civilians -- according to an AFP tally compiled from various sources.
The recapture of Jaar and Zinjibar on Tuesday came just hours before the UN Security Council unanimously passed a resolution threatening sanctions against groups seen as undermining Yemen's political transition.
The main targets of Resolution 2051 were the family and supporters of ousted president Ali Abdullah Saleh, although they were not named in the text, diplomats in New York said.
Saleh has been accused by his opponents of allowing Al-Qaeda to take hold of large swathes of the country's south and east, and of meddling in the new government's affairs.
The resolution also backed President Abdrabuh Mansur Hadi, who pledged to destroy Al-Qaeda when he was sworn in as Saleh's successor in February.