The crack snipers struck as crazed executioners held knives to the throats of a father and son near Mosul.
Both men, from a family of eight, had refused to convert to Islam and were about to be executed when the Isis killers were blasted in their heads.
The operation was carried out following the fall of Mosul last July and but has only just been made public, the Star on Sunday reported.
British troops were informed a black-clad death squad of Islamic extremists were targeting Christian civilians near the war-torn city and set out to investigate.
Using L115 rifles and loaded with .338 Lapua Magnum bullets, the snipers shot dead two fighters from 1,000m away.
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Then then turned their weapons on another pair of fighters.
As more jihadis tried to flee in a truck, they were taken out in a firefight that lasted around half an hour.
The family were led to safety before another 80 fighters drove up to collect the bodies of the fallen terrorists.
A source told the paper it was “a great day for the SAS”.
They said: “It was a chance encounter.
“The SAS patrol just happened to be in the right place at the right time.
“The killers were moving around the area executing villagers. Muslim families were accused of being spies and Christians who refused to convert to Islam were beheaded.
“When the snipers opened fire everyone just froze. But after four terrorists were dropped the rest of the gunmen tried to run and began firing in all directions. Only the family stood still.
“The Isis fighters tried to escape in a truck, but the driver was shot dead and those who had climbed on board were also killed.”