The storm started at dawn on Tuesday, hitting mainly Baghdad and turning the sky orange and reddish-brown. Many people wore masks in the streets to avoid inhaling the particles.
In the morning, flights were suspended at the airports of Baghdad and Najaf before they were resumed later in the afternoon when the storm passed, said Iraq Civil Aviation Authority spokesman Jihad Al Diwan and an official at Najaf airport.
The Iraqi Civil Defence Corps issued instructions to residents, urging them to be cautious when travelling through cities and asking people to limit their movement as much as possible.
It also called for medicine for those with respiratory problems to be kept handy and advised people to wear masks and sunglasses, keep children indoors and wash faces if exposed to dust.
A hotline has been set up for emergencies.
Iraq's Meteorological Authority said they expect the dust storm will gradually recede in the coming days.
“The increase in wind speed has contributed to the rise of dust, as well as the lack of rainfall this year in addition to desertification and the fragility of the land and lack of vegetation,” director Iraq's meteorological office, Amer Al Jabri, said in a press statement.
“We are expecting the dust to continue to increase this year,” Mr Al Jabri said.
Iraq is particularly vulnerable to climate change, having already witnessed record low rainfall and high temperatures in recent years.
The dust storm is the latest in a series to hit the country since last week. Thousands have been admitted to hospital with breathing problems.
Health Ministry spokesman Said Al Badr told AFP that several people were admitted to hospital with breathing difficulties, but most cases were minor.
Climate change and drought, combined with a reduced flow of water in the Tigris and Euphrates rivers, are blamed for dust storms as more parts of the country succumb to desertification.
The storm is expected to last for a few days, the Directorate of Meteorology and Seismology said.
In 2016, the UN Environment Programme said Iraq could suffer 300 dust storms a year within a decade.
The country is facing its worst environmental crisis to date, with acute water shortages and climate change affecting food security and the daily lives of Iraqis.
Experts have said these factors threaten social and economic disaster in the war-scarred country.