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The American president is speaking at the national convention of the Disabled American Veterans in Atlanta.
He confirmed that an August 31 deadline for withdrawal of combat troops will be met.
"Make no mistake, our commitment in Iraq is changing-from a military effort led by our troops to a civilian effort led by our diplomats," he said.
"By the end of this month, we'll have brought more than 90,000 of our troops home from Iraq since I took office-more than 90,000."
A transitional force of 50,000 soldiers will remain to train Iraqi security forces, conduct counterterrorism operations and provide security for ongoing US civilian efforts, Mr Obama said
"We will change our military mission from combat to supporting and training Iraqi security forces," he said.
While the number of soldiers in Iraq decreases, America has increased its commitment in Afghanistan, ordering a surge of 30,000 additional troops.
But with casualties on the rise, there are fresh concerns about the nine-year-old mission in Afghanistan.
The president plans to begin withdrawing troops in Afghanistan in July 2011, a timetable that critics say will embolden the Taliban.
Source: Sky news