Meeting the August 31 deadline allows Obama to say he is fulfilling a pledge to end the war launched by George Bush, his predecessor, seven years ago.
However, some 50,000 US troops will remain until the end of 2011 to advise Iraqi security forces in combat missions and protect US interests - in what Washington is calling an "advisory and support" role.
But the failure of Iraqi leaders to form a new government almost six months after elections, and persistent attacks by fighters, have done little to instill confidence among Iraqis.
Overall violence in Iraq has fallen sharply since the peak in 2006-07 of the sectarian killings unleashed after the 2003 US-led invasion, but levels of violence remain high.
Al Jazeera's Mike Hanna reports from Baghdad on Iraqis who are left wondering what the future will bring.
"Although security remains a major concern for Iraqis, as US forces reduce their numbers in the country, of prime concern still is the lack of any effective governance," our correspondent said.
Source: Al Jazeera