The plan to withdrawal all remaining American troops came after U.S. and Iraqi officials failed to come up with a plan to keep thousands of troops in Iraq as a training force.
To date, more than 1 million Americans have served in the war in Iraq. Approximately 39,000 are still there, but this December, the last of the troops will come home.
"After nearly nine years, America's war in Iraq will be over, and today, I can say our troops in Iraq will definitely be home for the holidays," President Obama said Friday.
Mr. Obama has said consistently that he would remove all troops by the end of 2011, but there was an expectation that Iraqis would ask for some U.S. military trainers to stay. Those discussions broke down because the Iraqis would not grant the remaining U.S. troops immunity from prosecution, a deal breaker for the United States.
The war in Iraq began more than eight years ago, and within weeks, coalition forces took control of Baghdad. At the war's peak in 2007, more than 170,000 troops were serving in the country.
More than 4,400 Americans have been killed in Iraq since the war started March 19, 2003. More than 32,000 troops have been wounded, and the total cost so far, according to the U.S. Department of Defense, is more than $715 billion.
"Here at home the coming months will be another season of homecomings," said the president.
Mr. Obama cast the latest announcement as part of a larger transition with the deaths of Osama bin Laden, Anwar Awlaki and Moammar Gadhafi.
Some Republicans have warned that a complete drawdown of U.S. troops could destabilize Iraq and lead to sectarian violence.
"I think there is greater risk of renewed violence, of continued Iranian penetration into Iraq that's already in southern Iraq," said Republican Sen. John McCain, who represents Arizona.
The end of the Iraq war was set in motion in 2008 when then-President Bush approved a deal calling for U.S. forces to withdraw by December 31, 2011.
Pres. Barack Obama spoke with Iraqi Prime Minister Nouri al-Malaki about the troop withdrawal Friday. The two are expected to meet at the White House again in December.