Almost half of the PSNI's Full-Time Reserve is to be retained despite a Patten Commission recommendation that it be disbanded.
The Chief Constable told a committee meeting of the policing board yesterday that just under 300 members of the reserve ranks would go in the 12 months after March 2009.
However Sir Hugh Orde, citing the dissident republican threat, also said that there was still a need for 134 reserve officers to be retained in urban and 247 in rural regions of Northern Ireland after that date.
The Full Time Reserve was formed in 1972 to support the RUC at the worst of the Troubles and had 5,000 in its ranks at its peak. Some 49 of its members died in the course of duty.
However the Patten Commission, which led to the establishment of the PSNI in 2001, said it should be phased out and that all officers should be fully trained graduates of the PSNI college.
The decision to retain the reserve has been welcomed by unionists and criticised by Sinn Féin.
Sir Hugh said: "Dissident republican groups remain the most significant threat to policing and continue to plan attacks on police patrols and stations," he said.
"This threat is not evenly distributed and some areas are dealing with a more normal security environment than other areas who are still dealing with some unique policing challenges."
He added: "In light of the security assessment, my senior management team and I have concluded that there remains a need to retain the services of a full-time reserve complement in order to secure the police estate and also provide protection and security in the external police environment.
"Our analysis is that the developments and improvements we have witnessed since September 2004 mean that we can reduce the requirement from 680 to 381 - a reduction of 299." The Police Federation, the union for rank and file officers, said the decision was a sensible compromise.
Security Minister Paul Goggins supported Sir Hugh's decision: "The fact that 381 full time reserve officers will remain indicates that we still need to guard against the residual threat from dissidents and loyalist paramilitaries."
Ulster Unionist policing board member Basil McCrea said the reservists should be retained while a paramilitary threat endures.
DUP member Jeffrey Donaldson said: "While there is to be a reduction in the number of full-time reservists in the police I have sought assurances from the Chief Constable as to what impact this will have on front-line policing. At a time when there are calls from right across the community for an increase in police resources it is concerning that there will be a manpower reduction.
Sinn Féin criticised the decision. Policing spokesman Alex Maskey said the decision was "regrettable".
"The implementation of the Patten proposals is about delivering good community policing and this move is in direct contravention of these recommendations."