The Swiss-based humanitarian agency, however, stressed its work in the occupied country would go ahead.
"We are reducing the number of international staffers," Pierre Krahenbuhl, ICRC director of operations said on Wednesday.
The ICRC had about 30 international staff and 600 local staff in Iraq.
The decision to cut back on international staff came after a car bomb explosion rocked the ICRC headquarters in Baghdad, killing several people.
The organisation has been in Iraq since 1980, visiting prisoners, distributing medicines and maintaining water supplies.
"The ICRC is not withdrawing from Iraq," Krahenbuhl explained. Details of how many staff would leave the country were still being worked out.
Monday's explosion has left international aid organisations uncertain over their future in Iraq.
Medical charity Medicines Sans Frontieres has also announced that it is pulling out four of its seven expatriate staff from Iraq.
"We are reducing the number of international staffers"
ICRC director of operations
"The other three will stay for the time being to sort out how to continue our programme in the best way," Marc Joolens, the agency's Iraq operations coordinator said.
The ICRC decision on staff reduction came after US Secretary of State Colin Powell urged the organisation not to pull out of Iraq.
On Tuesday, Powell phoned ICRC chief Jakob Kellenberg and urged the organisation to stay.
However,the ICRC decided on the reduction keeping in mind the safety of its staff.
"Monday's attack was a devastating blow," Krahenbuhl said.
"Any targetted attack on civilians was a serious violation of international humanitarian law and they must stop immediately," he said.