UNMIK spokesman Neeraj Singh said the mission has already started to reduce the number of people helping run the civil administration, which has been under UN control since 1999.
The announcement came one day after about 100 ethnic Albanians staged an anti-UN demonstration in Prishtina. Nearly 40 people were arrested after they spray-painted graffiti on UN vehicles.
Kosovo is legally part of Serbia and Montenegro but has been under UN control since the 1999 NATO bombing campaign chased Serbian forces from the predominately ethnic Albanian province.
Talks to determine Kosovo's future are due to start before the end of this year.