Recep Tayyip Erdogan, the Turkish prime minister, said Ankara would continue to fight the PKK and urged its fighters to lay down their arms.
The offensive included ground assaults and air raids and targeted rebel positions in and around Zap, a mountainous snow-bound region near the Turkish border, where a major PKK base and training camp is located.
The PKK, however, has another major stronghold in the Qandil mountains further to the southeast, along the Iraq-Iran border, and hundreds of fighters inside Turkey.
The PKK, listed as a "terrorist group" by Ankara and many other countries, has waged an armed campaign in Kurdish-majority southeast Turkey since 1984.
A key test of the effectiveness of Turkey's ground incursion could come with the arrival of spring - the traditional start of the fighting season for the PKK.
In the past, fighters have taken advantage of the weather and infiltrated Turkey from bases in Iraq, and any surge in PKK attacks could trigger another tough response from the Turkish military.
Sinan Ogan, head of the Turkish Centre for International Relations and Strategic Analysis, said: "It is very clear that an established group like the PKK will not be eliminated with one or two more cross-border operations.
"Turkey needs to pinpoint operations against the group's leadership, like Israel's operations against Palestinian groups."
At least 240 Kurdish fighters were killed during the operation, according to a military statement, while the army lost 27 soldiers.
The PKK claims to have killed more than 100 Turkish soldiers, but has not given a figure for fighter casualties.
Hoyshar Zebari, Iraq's foreign minister, welcomed the Turkish pullout saying: "We think this is the right thing for Turkey to do."
The troop withdrawal came a day after George Bush, the US president, and Robert Gates, the defence secretary, told Turkish leaders they should end the offensive as soon as possible.
But the Turkish army said the withdrawal decision was made "under no external or internal influence".
Ahmed Danis, a spokesman for the PKK, confirmed the Turkish troop pull-out on Friday.
He said: "We are observing military movements like empty military trucks coming from Turkey. The trucks are being loaded with troops and returning to Turkey."