British Armed Forces Minister Adam Ingram formally announced the withdrawal, and noted that Bosnia is increasingly secure.
"The security situation [in Bosnia] is stable," Ingram said. "The local authorities are able to cope with all but the most serious incidents. The Welsh Guards who are currently deployed will therefore not need to be replaced with any further maneuver troops. More than 600 troops, principally from the Welsh Guards, will return to the United Kingdom."
The European Union said in a statement today it will reduce its 6,000-strong peacekeeping force in Bosnia, leaving around 2,500 troops.
Coinciding with the withdrawal announcement, Britain's Prince Charles and his wife, Camilla, today visited British troops in Bosnia.
Meanwhile, Britain has announced plans to bolster its forces in Afghanistan, while pulling some out of Iraq.