Some 900 British troops are to be withdrawn from Northern Ireland as part of a wide-ranging overhaul of the British defence forces.
The announcement was not well received by political parties in the North. While the DUP said the reductions would cause concern in the community, Sinn Féin described the move as an insult to people's intelligence.
Two infantry battalions - the 3rd Battalion, Parachute Regiment and 1st Battalion, Royal Irish Regiment - will be redeployed as part of a review that will also see three naval vessels withdrawn from service on the North's coastline by 2007.
The announcement comes a month after a battalion and a unit were transferred out of Northern Ireland and will mean the British troop compliment will be reduced to 12,700 out of 13,600 service personnel by September 1st.
Command will be from GOC Northern Ireland, Lieut Gen Sir Philip Trousdell, to that of the Commander in Chief Land Command, headquartered at Wilton near Salisbury. The rear battalions are rarely deployed in the North and neither are currently based there.
Making the announcement, Defence Secretary Geoff Hoon said he was confident that there would be sufficient personnel to continue supporting the police even if there were a "significant deterioration in the security situation".
The PSNI Chief Constable Hugh Orde was consulted about the change, the army said.
Sinn Féin's Mr Alex Maskey said: "Only the British Government could possibly believe that anybody will buy an announcement that two regiments based and living in England and Scotland changing their command structures is demilitarisation.
"It is not and this announcement insults the intelligence of every citizen here still living under military occupation."
In the House of Commons, the DUP's Mr Nigel Dodds MP hit out at the development. He said the plan meant that four battalions had been cut this year.
"The proposal to reduce a further two battalions committed to the Province will cause real concern to many people in Ulster.
There remains a high degree of instability and insecurity in many communities. The Provisional IRA retains the capacity to inflict serious terrorism when it wishes to do so. It is madness to take any risk which could place those communities in greater danger," the north Belfast MP said.
Coincidentally, the move follows a report by the Independent Monitoring Commission said "the gap between current actual deployment and the envisaged peace time level is still very wide". If the paramilitary threat is considered to no longer exist, troop levels are due to fall to 5,000.