The Iraqi cabinet has approved a security pact with the US governing the future presence of 150,000 US troops in the country, officials have said.
Under the deal, American troops will withdraw from the streets of Iraqi towns next year, leaving Iraq by the end of 2011.
The decision will need to go before Iraq's parliament for a final vote.
America's National Security Council welcomed the cabinet's vote, saying it was "an important and positive step" towards stability and security.
The pact is necessary to determine the role of US military forces in Iraq after their UN mandate expires on 31 December 2008.
In October, Iraq sent a new round of suggested changes to the draft Status of Forces Agreement, to which the US responded.
Washington had previously said the pact was "final" and could not be amended.
There are currently about 150,000 US troops deployed in Iraq.
The cabinet approved the pact after a two-and-a-half hour meeting, government spokesperson Ali Dabbagh said.
All but one of the 28 ministers present had voted in favour of the pact, he added.
US National Security Council spokesperson Gordon Johndroe said the US hoped for a successful vote in the Iraqi parliament:
"We remain hopeful and confident we'll soon have an agreement that serves both the people of Iraq and the United States well and sends a signal to the region and the world that both our governments are committed to a stable, secure and democratic Iraq," he said.
