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Yazidi activist Nadia Murad said on Saturday she will use the prize money from her Nobel Prize to build a hospital in Iraq, that will treat the victims of the Islamic State group.

Murad was held as a sex slave by the group after the militants took Yazidi areas of northern Iraq in 2015, but managed to escape captivity.

She won this year's Nobel Prize with Congolese doctor Denis Mukwege for their efforts in trying to end sexual violence in war zones, with a $1 million prize.

Murad told a crowd at her hometown of Sinjar, northern Iraq, that she will use the money awarded for the Nobel Prize to build a hospital for the victims of IS in the town.

"With the money I got from the Nobel Peace prize, I will build a hospital in Sinjar to treat ill people, mainly widows and women who were exposed to sexual abuses by Islamic State militants," she told the crowd and gathered journalists in Sinjar.

Murad thanked Iraqi and Kurdish governments for allowing construction of the hospital to begin "soon".

IS captured large parts of northern Iraq and eastern Syria in 2014, during a lightning campaign that saw Iraqi troops flee south leaving civilians defenceless to the militants. 

IS kidnapped 7,000 Yazidi women and girls and held them as sex slaves during the campaign.

More than 3,000 Yazidi were murdered, mostly men and the elderly, in the days after IS took over areas around Sinjar, while children were forced into military conscription.