The British-led coalition base in Basra will lower its flag and transfer to US control as American soldiers arrive to take up a new role that includes the training of Iraq's fledgling police force.
"It will be a significant day because it signals the completion of Britain's military tasks here," Major General Andy Salmon, the outgoing British commander of the base, told AFP ahead of the pull out.
"We have had some difficult times but we look ahead to the future with a huge amount of optimism for Iraq."
Britain, under then prime minister Tony Blair, was America's key ally when president George W. Bush ordered his forces to invade Iraq in March 2003.
British troop numbers in the campaign were the second largest, peaking at 46,000 in March and April six years ago during the US-led invasion, and 179 of its servicemen and women have died in the country.
A deal signed by Baghdad and London last year agreed the remaining 4,100 British soldiers would complete their mission -- primarily training the Iraqi army -- by June, before a complete withdrawal from the country in late July.
The British contribution to the war and subsequent reconstruction effort was recognised by both American and Iraqi officers ahead of Tuesday's handover.
"British forces have been our strongest ally throughout this campaign," US Army Major General Michael Oates, who will become the senior coalition officer in Basra when the British-led unit ceases to exist on Tuesday, told AFP.
"They have done an outstanding job and our task is to continue that work," Oates said.
The Iraqi army's senior officer in the province used a farewell feast at Basra's Shaat al Arab Hotel at the weekend to thank Britain for its support in the wake of Saddam's ouster.
"I would like to thank the British nation for the assistance they have provided to help rid us of dictatorship and live in freedom and democracy," said Major General Hawedi Mohammed.
"The Iraqi Army and the Iraqi public will remember the sacrifice by British forces for some time to come. Our thoughts and prayers are also with the families of the British soldiers who lost their lives in this country."
Basra, Iraq's third-largest city and a strategic oil hub, had been under British control since the invasion, but the province and its airport returned to Iraqi sovereignty three months ago.
As well as training the Iraqi army, Britain has also been key in the rebirth of the war-torn country's new navy.
A Royal Navy training team is based at the southern port of Umm Qasr and its role is expected to continue although a new agreement has yet to be reached between the two governments.
Relations between London and Baghdad should in theory revert to the same footing as those between other countries when British troops complete their withdrawal in the summer.
The British pull out comes as the US military also steps up preparations to leave Iraq.
Under a US-Iraqi security agreement signed in November last year, US troops are to withdraw from major towns and cities by June 30 and from the whole country by the end of 2011.
President Barack Obama has ordered an end to US combat operations in Iraq by August 31 next year, but says 50,000 troops will remain under a new mission to expire at the year-end deadline.