Ukrainian forces had surrounded the factory since the end of May, a fortnight after Russia launched its attack into the Kharkiv region.
Vovchansk lies near the border with Russia and is the biggest town taken in the incursion.
Reports of the battle described how hundreds of Russian soldiers turned the factory into a “fortress”, deliberately creating a “dense” urban combat scenario to ambush Ukrainian soldiers.
Ukrainian’s defence ministry said its special forces had to fight in “hand-to-hand combat” to recapture the factory.
“Despite strong resistance by the Russians, Ukrainian soldiers managed to kill many of them and capture some prisoners of war,” it said.
Photos and video from Vovchansk showed the once lush town of 18,000 people totally destroyed. Its apartment blocks lie in ruins, the roads are ripped up and broken and the trees are reduced to burnt stumps.