"We have now reached a point where we can begin withdrawing our special forces because (IS) no longer has control over large areas in Iraq," Danish foreign minister Anders Samuelsen said in a statement.
The withdrawing process will conclude in late autumn, while Denmark will still leave in Iraq around 180 military personnel deployed at the al-Asad air base.
"It is important to stress that the fight against IS [Daesh] isn't over yet," the minister stressed.
Commenting on the issue, Danish defense minister Claus Hjort Frederiksen said Iraq was now ready to "stand on their own two feet."
Iraq has long been suffering from activities of various terrorist groups. In 2014, vast territories of the Middle Eastern state were occupied by Daesh.
The Iraqi army has successfully fought back against Daesh over the past year. In December, Iraqi Prime Minister Haider Abadi declared an end to the country's fight against Daesh as Iraqi troops re-established complete control over the country's Syrian border.
The Danish parliament approved sending a 60-member contingent to Iraq in August 2016. The troops were tasked with assisting the Iraqi military in training and escorting.
*Daesh [IS, ISIL, Islamic State] — a terrorist organization, banned in Russia.