Troops were in Sheikh Miskeen's main square and had taken over the eastern and northern neighborhoods of the town that lies on a major supply route from Syria's capital Damascus to the city of Deraa, the army said in a statement.
A militant source confirmed that troops had entered the outskirts of the town but said fierce clashes continued, Reuters reported.
The army offensive toward Sheikh Miskeen is part of the government's first major assault in southern Syria since Russia joined the fight on Sept. 30 to support its ally President Bashar Assad.
Russia, which did not confirm the strikes and has up to now concentrated on the northwest and coastal areas, has said it is targeting hardline ISIL fighters and other terrorist groups.
The army took the Brigade 82 base from the terrorists on Tuesday, lost it as bad weather set in, they took it once more overnight with the support of the airstrikes.
Syria's army said it had made advances overnight against terrorists who were mainly al Qaeda inspired groups.
The recapture of Sheikh Miskeen, located at the heart of Deraa province, would consolidate the army's hold over the heavily fortified region which has formed a southern line of defense protecting Damascus.