On a main road into the city of Basra, a banner proclaims: "The handover of the province will give life back to a region which has suffered so much."
British troops have been in Basra province since April 2003, when 40,000 soldiers were deployed as part of the US-led invasion of Iraq.
After the handover of Basra, the British troops are expected to provide specialist backup to the Iraqi security forces, such as patrolling Iraq's border with Iran.
"Of course, we are ready to take charge of security," said Abu Wissam, a police officer on patrol in the city centre's Al-Jazair street.
"We are urging the residents of Basra to respect the security forces and their missions," he said.
But uncertainty remains over their ability to keep the local factions from each other's throats, particularly given the region's vast oil wealth.
It produces more than 70 per cent of the country's oil and 80 per cent of Iraq's crude exports go through Basra's port.
John Cookson, Al Jazeera's correspondent in Iraq, said: "Now the focus will be on trying to attract billions of dollars of investment into Basra province. But that will only come if security is maintained."
At stake in Basra is control of the Southern Oil company, which in turn controls the region's oil industry, and the billions of dollars in revenue it generates for the state.