President Obama announced a new military strategy on Thursday that will cut the Pentagon budget by hundreds of billions of dollars over the next decade.

Speaking from the Pentagon, Obama said the plan is "smart, strategic" and sets priorities.

"I just want to say that this effort reflects the guidance I gave throughout this process," Obama said. "Yes, the tide of war is receding. But the question that this strategy answers is what kind of military will we need after the long wars of the last decade are over. And today, we're moving forward, from a position of strength."

The new military strategy includes $487 billion in cuts over the next decade. An additional $500 billion in cuts could be coming if Congress follows through on plans for deeper reductions. The announcement comes weeks after the U.S. officially ended the Iraq War and after a decade of increased defense spending in the aftermath of the Sept. 11, 2001, attacks on the United States.

Obama said that the military will indeed be leaner, but the U.S. will maintain a budget that is roughly larger than the next 10 countries' military budgets combined.

"Some will no doubt say the spending reductions are too big; others will say they're too small," Obama said. "It will be easy to take issue with a particular change. But I would encourage all of us to remember what President Eisenhower once said — that 'each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs.' "

That new strategy turns away from labor intensive wars, such as Iraq and Afghanistan, analysts say.

"The attitude is no more Iraqs," said Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments.

Iraq and Afghanistan were large nation-building efforts requiring thousands of troops. The emphasis on the future will be to partner or advise foreign militaries in order to counter threats, Krepinevich said.

"The Army and Marine Corps are going to take the biggest hits," Krepinevich said. Both services grew in size to fight wars in Afghanistan and Iraq.

Defense Secretary Leon Panetta said the sizes of those services would be reduced. But Special Forces troops, which can be used to train foreign militaries, will increase in size. The new strategy sees a need to counter China's growing influence in the Pacific.

"We'll be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of this critical region," Obama said.

Contributing: Jim Michaels