Defence Minister Joel Fitzgibbon says Australia's combat role in Iraq is over, after the announcement from the Defence Force that around 550 combat troops are withdrawing from the country.

A flag-lowering ceremony has been held at Camp Terendak at the Talil Air base to signify the end of the Australian commitment there.

Mr Fitzgibbon said the withdrawal of the troops would close another chapter in Australian military history.

"Our soldiers have worked tirelessly to ensure that local people in southern Iraq have the best possible chance to move on from their suffering under Saddam's regime and, as a government, we are extremely proud of their service," he said in a statement.

Details of the soldiers' return to Australia were not immediately available, but a spokesman for the minister said it would be completed by the government's deadline of mid-2008.

"They will be moved home over the course of the next month," he said.

The majority of the soldiers have been serving in the Overwatch Battle Group, which has been overseeing the security of Al Muthanna and Dhi Qar provinces.

The army team which has been training Iraqi soldiers is also coming home, but around 1,000 others will stay in Iraq in a range of non-combat roles - including the security detachment in Baghdad which protects Australia's embassy.

A welcome parade will be held in Brisbane upon the troops' arrival.

Australia was one of the first countries to commit troops to the Iraq war. In addition to the combat troops, it also deployed aircraft and warships to the Gulf to protect Iraq's offshore oil platforms.

Australia's top military commander, Air Chief Marshal Angus Houston, said in February that after the troops pulled out, Australia would leave behind two maritime surveillance aircraft and a warship helping patrol the oil platforms, as well as a small force of security and headquarters liaison troops.

- ABC/Reuters