Maj Gen John Cooper, the general officer commanding South East Area, handed back responsibility for security to the local governor in Muthanna.
Locals went to great lengths to ensure that decorations were in place to provide an attractive backdrop to the handover ceremony.
Iraq Prime Minister Nouri al-Maliki addressed an audience during the ceremony, which was held at a sports stadium.
Supporters were on hand to salute Iraqi President Nouri al Maliki at the ceremony.
Iraqi security forces went on a parade to commemorate the event, which was the first handover of its kind.