The announcement follows months of talks between Washington and Baghdad on the future of the coalition, which was established in 2014 to help local forces retake swathes of territory seized by the jihadists in Iraq and neighboring Syria.
The coalition's military mission in Iraq will conclude "no later than the end of September 2025," a joint US-Iraqi statement said.
A senior US administration official said the two sides have agreed on a "two-phase transition plan," the first of which lasts until September next year and will involve "ending the presence of coalition forces in certain locations in Iraq."
The coalition will continue its military operation in Syria, with international troops permitted to support anti-IS operations there from Iraq through the second phase of the plan, which runs until September 2026, the official said.
But neither the joint statement nor US officials shed light on the key question of the future number of US troops in Iraq, where there are about 2,500 American personnel deployed as part of the coalition.
A senior defense official said that "we're not going to speak to our plans concerning specific base locations or troop numbers," adding: "We have been and will continue to be in active dialog with the government of Iraq about how our bilateral relationship will evolve."
The joint statement says that "Iraq continues to engage with the United States and other members of the coalition to establish bilateral security relations where appropriate."
Iraqi Defense Minister Thabet al-Abbassi said earlier this month that the coalition would pull out of bases in Baghdad and other parts of federal Iraq by September 2025 and from the autonomous northern Kurdistan region by September 2026.
Abbassi told pan-Arab television channel Al-Hadath that US Defense Secretary Lloyd Austin had said two years was not enough to complete the process, but that "we refused his proposal regarding an (extra) third year."
Coalition forces have been targeted scores of times with drones and rocket fire in both Iraq and Syria, as violence related to the Israel-Hamas war in Gaza since early October 2023 drew in Iran-backed armed groups across the Middle East.
US forces have carried out multiple retaliatory strikes against these groups in both countries.
IS was defeated in Iraq in 2017 and in Syria in 2019, but jihadist fighters continue to operate in remote desert areas although they no longer control territory.
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