Approximately 6,000 European and US soldiers, including 1,000 British troops, will be involved in a number of offensives set up to halt the advance of the jihadist terror group.
The operation will be led by Italian forces and supported mainly by Britain and France.
Special Forces, including military close observation experts from the Special Reconnaissance Regiment, are spearheading the major coalition offensive against the jihadist group, according to the Daily Mirror.
IS has seized several revenue-boosting oil fields in Libya and is eager to win more control over the country, as the land could provide them with millions of dollars to fund terror attacks.
The terrorist network is now targeting the Marsa al Brega oil refinery, the biggest in North Africa.
If jihadists successfully capture the oil refinery, located between Sirte and Benghazi, they would gain full control of the country’s oil.
Britain’s SAS is working with Libyan commanders to advise them on key “battle-space management” tactics to control the battlefield using troops, tanks, warplanes and navy ships.
They will also send intelligence to Ministry of Defence (MoD) chiefs that could be used to determine whether airstrikes are needed.
A senior military source told the Mirror: “This coalition will provide a wide range of resources from surveillance, to strike operations against Islamic State who have made significant progress in Libya.
“We have an advance force on the ground who will make an assessment of the situation and identify where attacks should be made and highlight the threats to our forces.”
“Moreover, the ideologies of jihadism and of political Islam are alive and well. It is far too soon to write off Islamic State and organizations similar to it.”
European Union foreign policy chief Federica Mogherini told IB Times: “In Libya, there is the perfect mix ready to explode and in case it explodes, it will explode just at the gates of Europe.”
The Libya intervention would mark the first time British troops have officially taken part in a direct ground assault against IS.
Libya has been in the throes of a chaotic civil war since the 2011 ousting of longtime leader Muammar Gaddafi. Today, two rival governments and parliaments compete for dominance amid a deepening Islamist insurgency.
More than 5,000 IS extremists are active in the country, according to the Libyan Interior Ministry.