One of the British army's main bases in Northern Ireland is to close and 500 soldiers moved back to Britain, Chief Constable Sir Ronnie Flanagan announced today.
Ebrington barracks in the Waterside area of Derry is expected to be cleared by the end of next year.
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"The battalion currently based there will be moving out," he said.
Another of the army's watchtowers at Glasdrumman, near Crossmaglen, south Armagh, is to come down and a security barrier in neighbouring Newtownhamilton reopened.
Work on all measures is to begin immediately, the Chief Constable said.
There had been significant successes against dissident republicans, but Mr Flanagan also warned there would be no let-up in the fight against terrorism.
He said: "The situation will be kept under continuous review, but with the hope and desire that we all as a society keep making progress along the road to normality."