President Joe Biden has said the U.S. military will leave Iraq later this year, although the military will continue to train and advise Iraqi troops.
The announcement came after Mr Biden held talks with Iraqi Prime Minister Mustafa al-Kadhimi at the White House.
There are currently 2,500 Iraqi forces helping local forces fight the remaining Islamic militants.
U.S. military numbers may remain the same but the move is seen as an attempt to help the Iraqi Prime Minister.
The US presence in Iraq has been a major issue since the assassination of Iran’s top general Qasem Soleimani and the Iranian-backed Shia Muslim military leader in an American air strike in the capital, Baghdad, last year.
Iran’s political parties have demanded the withdrawal of all US-led anti-IS forces, despite ongoing threats from the June Sunni group.
Currently Shia soldiers are accused by the United States of carrying out hundreds of rocket, mud and drone in Iraqi military bases holding allied forces in a visible attempt to force them to leave.
For the US president, the proclamation marks the end of a war that began under former President George W Bush. This year he said US troops would leave Afghanistan.
Speaking at the White House, Mr Biden told his Iraqi counterpart “our cooperation with terrorism will continue even as we move into this new phase.”
Mr Kadhimi responded: “Today our relationship is stronger than ever. Our partnership in economic, environmental, health, educational, cultural and more.” He stressed that no foreign troops were needed in Iraq.
US-led troops invaded Iraq in 2003 to overthrow President Saddam Hussein and to eliminate weapons of mass destruction.
President George W Bush then promised “a free and peaceful Iraq”, but was joined by a bloody protest.
The U.S. military finally withdrew in 2011. However, they returned at the request of the Iraqi government three years later, when IS troops invaded large parts of the country.
After the defeat of IS troops in Iraq at the end of 2017, US troops are left to help prevent the group’s revolt.
“Our role in Iraq will be based on our presence so that we can continue to train, assist, assist and deal with ISIS as it arrives,” Mr Biden said at the meeting.
“But we will not, at the end of the year, be in a campaign to fight.”