"I believe that our troops will be withdrawn this year," the Interfax news agency quoted Defence Minister Anatoly Hrytsenko as saying on Thursday.
The defence minister, who took up his post this month, said that no concrete timetable would be announced before a meeting scheduled next week of the national security and defence council.
"The president will decide what month this will take place, and it is the president's decision whether or not this will be carried out in two or three phases," he said.
Last week, Hrytsenko said that around 700 of Ukraine's 1650-strong contingent serving in a Polish-led multinational division probably would leave Iraq by the end of April.
Ukraine's decision is troublesome for the United States, with Poland already having decided to pull out a third of its 2400 soldiers because of strong domestic opposition to the deployment.
Last year Spain's incoming Socialist government withdrew the 1300 troops serving in Washington's "coalition of the willing."
700 of Ukraine's 1650 troops may
leave Iraq in April
New pro-Western President Viktor Yushchenko promised during his election campaign late last year to pull Ukrainian troops out of Iraq - the sixth-largest contingent in the US-led coalition forces.
The United States, which backed him during the "orange revolution" standoff with Leonid Kuchma's regime that brought him to power, responded by insisting that any withdrawal should be made gradually and in a coordinated way.
A defence ministry spokesman in Kiev reiterated Yushchenko's pledge to consult, including with the Iraqi administration elected in January, before making any moves.
"Before it withdraws its forces from Iraq, Ukraine will hold consultations with its coalition partners and the provisional government in Iraq," ministry spokesman Andrei Lysenko said.
"Of course Washington would like Ukraine to stay in Iraq, but Yushchenko can hardly back down on this issue as it was a campaign pledge"
Alexander Sushko, foreign policy expert
But commentators in Kiev said the withdrawal was not in doubt and Ukraine was willing to risk US ire, despite its hopes of one day joining Nato as well as the European Union.
"Of course Washington would like Ukraine to stay in Iraq, but Yushchenko can hardly back down on this issue as it was a campaign pledge," foreign policy expert Alexander Sushko said.
The EU members of Nato that opposed the Iraq invasion, including France and Germany, would welcome Kiev's decision as they "would like Ukraine to be less pro-American and more pro-European," he said.
Kuchma deployed troops in Iraq in what observers said was an attempt to mend fences with Washington, which accused him of approving a sale of military equipment to Saddam Hussein's government in Iraq despite an international embargo.
Eighteen Ukrainian soldiers have been killed in Iraq.