US combat troops could leave Iraq by 2011.
A draft security agreement also calls for US forces to withdraw from all Iraqi urban areas by June 2009.
The draft still needs to be approved by the Iraqi Presidential Council and by the parliament. It marks the end of 10 months of difficult negotiations.
The BBC reports the final date when US troops leave will depend largely on security.
The decision will be taken by a joint committee, which could reduce or extend the amount of time US troops spend in the country.
The top Iraqi official negotiating with the US on the status of US forces in Iraq, Mohammed al-Haj Hammoud, said a deal had been agreed that envisaged all US combat troops leaving Iraq by 2011.
Some US troops could remain beyond 2011 "to train Iraqi security forces", the AFP news agency quoted him as saying.
There are currently around 147,000 US troops in Iraq.