Rudd won Saturday's elections by a landslide, beating John Howard, the prime minister who staunchly supported the US-led war in Iraq.
 
Rudd had promised to withdraw the battle group from Iraq if elected but said he would leave behind some Australian soldiers, including those providing security at Australia's embassy in Baghdad.
 
Australia has some 1,500 troops involved in Iraqi operations, but most are outside the country.
 
The withdrawal plan covers only the 550 combat troops deployed in the south of the war-torn country.
 
Iraq was a key point of difference between Rudd's centre-left Labor party and Howard's conservative coalition during the election, but in his victory speech Rudd moved to allay US concerns about the troop withdrawal, describing the US as a great ally.
 
Last of 'coalition'
 
Robert McCallum, the US ambassador, said Washington would work with Rudd on the plan to withdraw combat troops from Iraq.
 
The withdrawal plan covers only the 550
combat troops deployed inside Iraq [EPA]
"It's a situation where Australia is determining how it is going to reposition forces and how it is going to deploy its resources in a new and different way, and we are looking forward to working with Mr Rudd in achieving that," McCallum said this week.
 
"There are going to be Australian troops left in Iraq as security forces that relate to the Australian embassy in Baghdad; there are naval forces and air forces that are offshore that relate to security issues," he added.
 
Howard was US President George Bush's last major partner in the "coalition of the willing" that once included former prime ministers Tony Blair of Britain; Jose Maria Aznar of Spain; Silvio Berlusconi of Italy; and former Polish president Aleksander Kwasniewski.
 
Blair's successor, Gordon Brown, has announced that the number of British troops in Iraq will be cut by more than half early next year.