The Echo Base in Diwaniya, southern Iraq is now under the full control of the Iraqi security forces.
Almost all US forces are due to leave the country by the end of this year when a bilateral security pact expires.
One US Colonel said there will be security challenges ahead.
(SOUNDBITE) U.S. COLONEL SCOTT EFFLANDT, SAYING(English):
"I think there will continue to be challenges with the security situation just like there are now. And I think with the support of the people and the government -- that the Iraqi army, Iraqi police will work through it and everything will be for the better."
US officials had asked for 3000 troops to stay in Iraq but talks fell apart over the issue of immunity.
A small contingent of under 200 troops will be attached to the US embassy.
Marie-Claire Fennessy, Reuters
