The focus was a memorial wall featuring the names of the 234 UK and foreign troops and civilians who lost their lives under British command in Iraq.
The names of those who died, including Italian, Dutch, Danish, American and Romanian troops, were read out before the Last Post was sounded and prayers said.
Then there was a loud roar in the sky as a Tornado aircraft flew over in tribute.
Those attending the service were adamant the British presence in Basra had been a force for good.
Lt Col Edward Chamberlain, commanding officer of Iraq-based battalion 5 Rifles, said: "We've been slowly working, as part of a coalition together over the six years, to achieve an end-state which is an Iraq which is secure, happy, at peace with itself and its neighbours.
"We're slowly but surely transitioning towards that."
Mr Hutton said British troops had fought "a long and hard campaign".
He added: "There's been no question about that, and we've paid a very high price.
Gordon Brown: 'Today Iraq is a success story'
"But I think when the history is written of this campaign, they will say of the British military: 'We did a superb job'."
British forces began their official pull-out last month when the UK's commander in the south of the country, Maj Gen Andy Salmon, handed over to a US general.
The civilian death toll in Basra as a result of the conflict is estimated at between 3,302 and 3,766, according to data from the Iraq Body Count.
Asked about the UK presence in Iraq, the country's president, Jalal Talabani, told BBC News that the mission had been one of liberation.
"In the past the British forces came to occupy against the will of the Iraqi people," he said.
"This time they came here to liberate Iraqi people from the worst kind of dictatorship."
But the UK Stop the War Coalition said: "The British soldiers will leave Basra in a much worse condition than they found it, its population depleted and demoralised, its infrastructure devastated."
BBC defence correspondent Caroline Wyatt says there is a sense of relief for many British servicemen and women that their final tour of Iraq is ending.
Some were serving on their fourth tour, taking them away from home for two years out of the last six.
But the BBC's John Simpson says many ordinary Iraqis in Basra are worried that the Americans who will replace them will be much more aggressive.
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