Ukrainian troops have targeted Slovyansk with sustained fire. Rebels which had seized the city in April have reportedly fled in the face of the offensive by the Ukraine military.
President Petro Poroshenko has ordered the army to raise the national flag in what had become a rebel stronghold.
The city of 130,000 people bore the brunt of much of the fighting in the east and was the scene of a fresh offensive launched by Ukrainian forces earlier this week after a 10-day ceasefire broke down.
Local media sources in the east reported separatists are leaving all towns which they had been holding and are now heading to Donetsk.