General Kenneth McKenzie, the head of the US military's Central Command, said in Baghdad that the decision was "due to our confidence in the Iraqi Security Forces' increased ability to operate independently."
"In consultation and coordination with the Government of Iraq and our coalition partners, the United States has decided to reduce our troop presence in Iraq from about 5,200 to 3,000 troops during the month of September," he said.
McKenzie said the US would be able to continue supporting the Iraqi military in its fight against the Islamic State group, which was driven out of its "caliphate" territory last year but remains scattered around Iraq.
He said the US was committed to its "ultimate goal" of an Iraq where local forces alone can prevent the Islamic State from returning and secure "Iraq's sovereignty without external assistance."
"The journey has been difficult, the sacrifice has been great, but the progress has been significant," the general said.
By late 2018, there were an estimated 5,200 American troops still stationed in Iraq, making up the bulk of the 7,500 coalition forces there, according to US officials.
Over the past year, dozens of rocket attacks have targeted those forces, the US embassy and logistics convoys heading to Iraqi bases, killing at least six military personnel -- three Americans, one Briton and two Iraqis.
US officials have blamed the violence on hardline factions close to Tehran, which as Washington's longtime foe has repeatedly demanded US troops leave the Middle East.
Trump is also set to announce further troop withdrawals from Afghanistan in the coming days, a senior administration official said.
Washington currently has 8,600 soldiers deployed in Afghanistan in accordance with a bilateral agreement signed in February between Washington and the Taliban.
Trump, who is trailing Democratic rival Joe Biden in the polls ahead of the November 3 presidential election, has promised to bring troops home in a bid to wrap up what he has called America's endless wars.