About 500 Australian combat troops today have begun pulling out of their base in southern Iraq.
A British military spokesman in the southern city of Basra said the pullout from Talil base in Nassiriya was underway.
But a spokesman for the governor of Dhi Qar province said it had been completed, with US forces replacing the Australians.
The pullout fulfils an election promise by Prime Minister Kevin Rudd to bring the soldiers home this year.
The Australian government had been expected to begin mid-year the withdrawal of the 500-member Australian battlegroup based at Tallil in southern Iraq under British command.
Mr Rudd had pledged during last year's election campaign to bring the troops home in contrast to the Howard government.
During his prime ministership, Mr Howard repeatedly said the troops should stay until the job was done, arguing Labor's plan to "cut and run" from Iraq would galvanise terrorists.
Preparations were made to pull out at the end of the troop's current six-month rotation in the middle of the year, and Britain and the US were informed.
Last week, British Defence Secretary Des Browne said Britain had planned accordingly for an Australian drawdown of troops.
"As it turns out, where they are working in Iraq is in an advanced stage of its own independence in terms of providing its own security," he said in a speech at the National Press Club in Canberra last week.
"Coincidentally, it was probably about time they were coming out of Tallil anyway so it works out in a way that suits all of us."
Britain still has about 4,000 troops in southern Iraq.
He said then that Britain was grateful to the people of Australia and to the troops for their "magnificent" contribution to Iraq.
In April, US Ambassador to Australia Robert McCallum said Washington harboured no hard feelings over the Labor government's decision to pull Australian combat troops out of Iraq.
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