This is the third time that the Islamist group moved into a town in the region after the departure of Ethiopian forces.
Fighters from the Al-Qaeda-linked Shabaab group said Sunday they had retaken control of a town in central Somalia after hundreds of Ethiopian troops serving with the African Union's AMISOM force withdrew.
It was the third time this month that the Islamist group moved into a town in the region after the departure of Ethiopian forces.
Al-Shabaab said on the smartphone app Telegram that their fighters had "stormed the town (of Halgan) soon after the enemy pulled out" on Sunday.
"The brave fighters of Islam have taken full control of the town, the Islamic flag is waving over the station and the district headquarters," the statement added.
After leaving Halgan together with Somali army soldiers, situated at a key junction on the road to the capital Mogadishu, the Ethiopian troops headed towards the provincial capital, Beledweyne, according to several sources.
"The Ethiopian soldiers pulled out of Halgan town this (Sunday) morning. We are getting (reports) that they have destroyed their bases and trenches around the town before heading for Beledweyne," said Mohamed Nur Adan, a security official in Beledweyne.
"The Ethiopian soldiers vacated their bases this morning, we saw them heading towards Beledweyne. There were tanks and big trucks in their convoy," witness Osman Adan told AFP by phone.
Halgan, situated about 70 kilometres (40 miles) from Beledweyne, came under assault from the Al-Qaeda-linked Shabaab in June.
The Islamists then attacked the Ethiopian army base with a suicide car bomber and gunmen. Scores were reported killed on both sides, however casualty numbers are impossible to verify.
The fall of Halgan is likely to increase pressure and attacks on AMISOM forces in Buloburde, which is the second largest town in the central Hiran region.
Earlier this month hundreds of Ethiopian troops pulled out of El-Ali — also in the Hiran region — after also withdrawing from nearby Moqokori.
Shabaab forces moved back in to both towns after the Ethiopians left.
No explanation has been given by the Ethiopian military or AMISOM.
The Shabaab was forced out of the capital, Mogadishu, five years ago but continues to carry out regular attacks on military, government and civilian targets in its battle to overthrow the internationally-backed administration.