The move confirms the Bush administration's change of heart over restrictions that excluded countries opposed to last year's invasion of the country.
The move was announced on Wednesday in a notice posted by Iraq's US-appointed Coalition Provisional Authority on a website devoted to Iraq procurement programmes.
Construction contracts worth an estimated $5 billion continue to be limited to firms from the United States, Iraq, coalition partners and countries that contributed troops to the the invasion force, the notice said.
"However, all countries are eligible for subcontracting in the $5 billion construction efforts," it said.
"All countries are also elibible to compete as prime and/or sub-contractors for the $6 billion non-construction contract efforts (one exception - $327 million New Iraqi Army Battalion Sets contract)," it added.
The United States infuriated European partners in December when it excluded bids for prime contracts by companies from countries such as Canada, France and Germany that opposed the war, citing national security interests.
The White House then backed-pedalled, telling Canada its companies could participate in future bids.
Pentagon officials said companies from western European countries also would be allowed to bid as primes in a second tranche of contracts.
The contracts are funded from an $18.6 billion grant by the US Congress.