The British troops will be withdrawn in phases, with combat operations due to end at the end of May and all but about 400 troops withdrawn by the end of July. Those staying behind will be involved in training Iraqis, according to the British Ministry of Defense.
Britain, which had been a staunch U.S. ally since the March 2003 invasion, handed over security responsibilities in Basra to the Iraqis late last year but continued to maintain its presence on a base at the airport outside the city.
The British military has reported 179 deaths since the war started.
Iraq's deputy chief of staff for armed forces Lt. Gen. Naseer al-Ebadi thanked the British forces for training and equipping the Iraqis and said his forces were ready to take over. "Iraqi security forces are capable of maintaining order and security," he said.