Laukkai, which borders China, is notorious for online scam operations.
The Kokang said six generals and more than 2,100 soldiers in the junta’s regional command centre surrendered on Thursday.

Myanmar’s military spokesperson Zaw Min Tun confirmed with the junta-aligned Popular News Journal on Saturday that the military had relinquished control of Laukkai after considering the safety of its soldiers.
He also blamed the rebel groups for firing shells over the border with China. Earlier this week, Beijing issued strong protests over artillery shells that injured five Chinese citizens in a border town in the southwestern province of Yunnan. The junta said the rebel groups were trying to “destroy the friendship” between the two countries.
Last month, China helped broker a temporary truce between the junta and the rebel groups, which ended on December 31. The two sides held two rounds of peace talks in Kunming, the provincial capital of Yunnan, but failed to reach any deal.
Beijing calls for Myanmar ceasefire after shelling injures five in Chinese town
Beijing calls for Myanmar ceasefire after shelling injures five in Chinese town
A third round of talks is planned for January, according to Myanmar media.
The Chinese foreign ministry said China would continue to play a “constructive role” and “provide support” for the peace process in northern Myanmar.
The rebel groups said one of the aims of their coordinated attacks since late October was to help crack down on online scam compounds in northern Myanmar.
Beijing has also stepped up efforts to target online scams operating in the Southeast Asian country after tens of thousands of Chinese nationals have fallen victim to the fraud rings.
Beijing is also believed to have increased pressure on the junta, which the rebel groups have accused of providing protection for crime families that run the scam syndicates in Myanmar.
The junta has transferred more than 40,000 suspects to China over the past year, including some of the most-wanted members of the families.