The US and South Korea have reached a deal to hand full control of South Korea's military back to Seoul by 2012.
Seoul's fears over North Korea delayed the command transfer
The agreement ends a 50-year pact that gave the US wartime command of South Korea's army, dating to the Korean War.
Under pressure in Iraq, the US had wanted to hand over in 2009. But South Korea pushed for a slower transition.
The US currently has 29,500 troops on the Korean peninsula and Seoul's military numbers 680,000. North Korea has more than one million troops.
US Defence Secretary Robert Gates and South Korean Defence Minister Kim Jang Soo made the announcement after talks in Washington on Friday.
They agreed on a transition "road map" starting in July and ending with a military exercise in March 2012.
"The two sides will disestablish the current ROK-US Combined Forces Command on April 17, 2012 and complete the transition to the new supporting-supported command relationship between US and ROK forces at the same time," the US said in a statement after the meeting.
The US has reduced its troop numbers in South Korea by 10,000, down from 40,000 when US President George W. Bush came to power. It plans to further reduce this number to 25,000 by 2008.
But Seoul's fears over North Korea's nuclear and missile tests last year were a factor in delaying the transfer until 2012.
A South Korean parliamentary committee this week opposed making any transfer of command until security was stabilised in the region.
The countries also agreed to speed up relocating US military headquarters in South Korea from Seoul to Pyeongtaek, about 65km (40 miles) south of Seoul.
South Korea ceded control of its military to a US-led UN force during the Korean War, which ended with a ceasefire in 1953.
It was given peacetime command of its forces in 1994 but the US would still take over should war break out on the peninsula.